Assignment: Net Present Value and Capital

2375 Words Oct 25th, 2012 10 Pages
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AMITY SCHOOL OF DISTANCE LEARNING
Post Box No. 503, Sector-44
Noida – 201303
FINANCIAL MANAGEMENT

Assignment A Marks 10
Answer all questions.

1.
a. Should the titles of controller and treasurer be adopted under Indian context? Would you like to modify their functions in view of the company practice in India? Justify your opinion?
b. A firm purchases a machinery for Rs. 8,00,000 by making a down payment of Rs.1,50,000 and remainder in equal instalments of Rs. 1,50,000 for six years. What is the rate of interest to the firm?
2.
a.Explain the mechanism of calculating the present value of cash flows..What is annuity due? How can you calculate the present and future values of an annuity due?
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One-fourth of sales are on cash basis. Cash balance expected to be Rs. 12,000.
You are required to prepare a statement showing the working capital needed o finance a level of activity of 70,000 units of output. You may assume that production is carried on evenly throughout the year and wages and overheads accrue similarly.

2. a. Through quantitative analysis prove that PI is a better technique than NPV in Capital Budgeting.
b..A company is considering the following investment projects:

| |Cash Flows (Rs.) |
|Projects | |
| |Co |C1 |C2 |C3 |
| | |…