Dear students, get fully solved assignments by professionals
Do send your query at :
or call us at : 08263069601
(Plagiarism proofed assignments
available with 100% surety and refund)
NMIMS
Global Access
Course:
Corporate Finance
Internal
Assignment Applicable for December 2023 Examination
Assignment
Marks: 30
Question. 1)
Calculate the WACC for M/s Antara Limited with the following information: (10
marks)
Capital Structure
BV Share Capital 50,00,000
Retained
Earnings 2,50,000
Debentures
15,00,000 Bank Loan 2,00,000
Share price
of M/s Antara Limited at the beginning of the year was Rs. 50 and end of the
year was Rs. 55 per share. Dividend declared was Rs. 5. Beta of the Company was
pegged at 0.6. M/s Antara had floated its Debentures at 8% fixed interest for 5
years. The bank had extended a loan on floating rate basis. Interest paid
during the year was Rs. 10000. Government securities are earning a return of 4%
currently.
Answer : To calculate the
Weighted Average Cost of Capital (WACC) for M/s Antara Limited, you need to
determine the cost of each component of the capital structure and then compute
the weighted average based on their respective proportions.
The components of the capital structure are as follows:
- Equity
(Share Capital and
Question. 2)
Calculate the Gross and the Net Operating Cycle for Vishal & Co. Ltd. using
thefollowing information. (Assume 360 days in a year). (10 marks)
|
Description |
Amount in Rs. |
|
Opening Balances |
|
|
Raw Material |
200,000 |
|
Work in Progress (WIP) |
60,000 |
|
Finished Goods |
600,000 |
|
Debtors |
250,000 |
|
Creditors |
550,000 |
|
Closing Balances |
|
|
Raw Material |
300,000 |
|
Work in Progress (WIP) |
65,000 |
|
Finished Goods |
725,000 |
|
Debtors |
215,000 |
|
Creditors |
575,000 |
|
Annual Transactions |
|
|
Annual Purchase of Raw Material |
3,200,000 |
|
Manufacturing Expenses |
550,000 |
|
Selling & Distribution Costs |
300,000 |
|
Sales |
4,480,000 |
Answer : To calculate the
Gross and Net Operating Cycle for Vishal & Co. Ltd., we'll first determine
the various components of the cycle.
Gross Operating Cycle:
The Gross Operating Cycle represents the time it takes for a
company to acquire raw materials, convert them into finished goods, and sell
those goods. It is calculated as:
Gross Operating Cycle = (Average Inventory Holding Period) +
(Average Receivables Collection Period)
- Average
Inventory Holding Period (AIHP): AIHP
represents the average time raw materials, work in progress (WIP), and
finished goods are held before being sold. It is calculated as the average
of the holding period of each component.
- AIHP
for Raw Material = (Raw
Question. 3)
a) What should be the amount to be invested:
i)
To receive Rs. 2,00,000 per annum in perpetuity at an interest rate of 8%.
ii)
In addition to conditions of point (i) above, if a growth rate of 3% is
expected every year.
To receive
Rs. 4,00,000 per annum in perpetuity at an interest rate of 5%. (5 marks)
Answer
: To calculate the amount to be invested to receive a perpetuity, you can use
the perpetuity formula, which is:
Amount to be Invested = Annual Payment / Discount Rate
Where:
- Annual
Payment is the amount you want to receive annually.
- Discount
Rate is the interest rate.
Let's
calculate the amounts to be invested
Question. b)
Calculate the current ratio and Acid Test Ratio with the following information
(5 marks)
|
Account |
Amount (in Rs.) |
|
Debtors |
500,000 |
|
Cash and Bank |
200,000 |
|
Inventory |
400,000 |
|
Trade Payables |
150,000 |
|
Bank OD |
50,000 |
Answer
: To calculate the current ratio and acid-test ratio (also known as the quick
ratio), you need to use the following formulas:
Current Ratio: Current Ratio = Current Assets / Current Liabilities
Acid-Test Ratio (Quick Ratio): Quick Ratio = (Current Assets -
Inventory) / Current Liabilities
Let's
use the provided information to calculate both ratios:
- Debtors:
Rs. 500,000
Dear students, get fully solved assignments by professionals
Do send your query at :
or call us at : 08263069601
(Plagiarism proofed assignments
available with 100% surety and refund)
No comments:
Post a Comment
Note: only a member of this blog may post a comment.