Attempt all the problems

problem1) a) Describe Yield to Maturity (YTM) method with the ex.

b) describe liquidation value approach and book value approach? What are their limitations?

problem2) a) describe the significance of time value of money in financial decision making.

b) i) Compute future value of Rs 1,00,000 if you deposit in the bank at 8% rate of interest for five years.

ii) What would be the present value of the annuity of Rs 20,000 paid at the end of every year for 5 years at 8% rate of return.

problem3) a) What do you mean by capital budgeting? Describe nature and types of Capital Budgeting decision.

b) ‘XYZ’ Ltd. has a revenue of Rs 6,00,000 and it has to provide for depreciation @10% on straight line basis. It has cash expenses of Rs 1, 20,000. The taxes are @50%. Show the net earnings on accounting approach basis and cash flow basis.

problem4) a) describe Operating Cycle? Why is it significant for Management of working capital?

b) describe the nature and objectives of credit policy.

problem5) describe the following:

a) Role of Stock exchanges

b) Project financing arrangements.