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JAIPUR NATIONAL UNIVERSITY,
JAIPUR
School of Distance Education
& Learning
Internal Assignment No. 1
Master of Business
Administration
Paper Code: MBA– 111
Paper Title: Financial Management
Last date of submission: Max.
Marks: 30
Note:
Question No. 1 is of short answer type and is compulsory for all the students. It
carries 1 Mark each.
(i) What is risk? How do you
distinguish between systematic and unsystematic risk?
Answer: Risk is
the potential of gaining or losing something of value.[1] Values (such as
physical health, social status, emotional well-being or financial wealth) can
be gained or lost when taking risk resulting from a given action or inaction,
foreseen or unforeseen. Risk can also be defined as the intentional interaction
(ii) Define “Miller and Orr model” of
cash management.
Answer: The Miller
and Orr model of cash management is one of the various cash management models
in operation. It is an important cash management model as well. It helps the
present day companies to manage their cash while taking into consideration the
fluctuations in daily cash flow. As per the Miller and Orr model of
(iii) State the features of money
market.
Answer: Distinguishing
features of money market are given below: 1. Constituents of Money Market 2.
Heterogeneous Market 3. Dealers of
(iv) Define the significance of
international finance management.
Answer: International
Finance is an area of financial economics that deals with monetary interactions
between two or more countries, concerning itself with topics such as currency
exchange rates, international monetary
(v) State the relationship between
BOP and national economy.
Answer: Gross
Domestic Product (GDP) and Gross National Income (GNI) are core statistics in
National Accounts. They are both
important economic indicators and useful for analysing the overall economic
situation of an economy
(vi)Differentiate “arbitration” and
“speculation” in foreign exchange market.
Answer: Arbitrage
is where a trader will simultaneously purchase and sell an asset with hopes to
make a profit from the differences in the price levels of the asset that is
bought and the asset that is being sold. It must be kept in mind that the
assets are bought and sold off different market places;
(vii) Define marginal cost of
capital.
Answer: Definition
The cost
associated with raising one additional dollar of capital. The marginal cost
will vary according to the type of capital used. For example, raising funds
through the use of unsecured or subordinated
(viii) Write a short note on JIT.
Answer: JIT is defined as “A technique for the organisation
of work-flows, to allow rapid, high quality, flexible production whilst
minimising manufacturing waste and stock levels.” (CIMA official
(ix) What are the conditions for the
redemption of redeemable preference share?
Answer: 1) Subject to this section a company having a share
capital may, if so authorized by its articles, issue preference shares which
are, or at the option of the company are to be, liable to be redeemed and the
redemption shall be effected only on such terms and in such manner as is
(x)
Mention the different types of dividend paid by companies.
Answer: (1) Subject to this section a company having a
share capital may, if so authorized by its articles, issue preference shares
which are, or at the option of the company are to be, liable to be redeemed and
the redemption shall be effected only on such terms and in such manner as is
provided by the articles.
NOTE: Answer any four
questions. Each question carries 5 Marks. (500 Words).
Q.2 What do you understand by
“Financial Management”? Discuss its significance in Business Management.
Answer: Meaning of Financial
Management
Q.3 What is capital budgeting?
Critically examine the various methods of evaluation of capital Budgeting
proposals.
Answer: Capital budgeting is the process in which a business
determines and evaluates potential expenses or investments that are large in
nature. These expenditures and investments include projects such as building a
new plant or investing in a long-term venture. Often times, a prospective
Q.4 Define dividend policy. Explain
briefly the factors which affect the dividend policy of a
firm.
Answer: A dividend policy is a company's approach to distributing
profits back to its owners or stockholders. If a company is in a growth mode,
it may decide that it will not pay dividends, but
Q.5 What is meant by inventory
control? Explain the different costs associated with inventory.
Q.6 Define cash management. Discuss
in detail the factors that determine the needs cash of a firm.
Answer: Cash management is the corporate process of collecting,
managing and (short-term) investing cash. A key component of ensuring a
company's financial stability and solvency. Frequently
Dear students, get latest JNU
MBA Solved assignments by professionals.
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Call us at: 08263069601
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