NMIMS Corporate Finance Solved Assignment April 2023

Description

NMIMS Global Access
School for Continuing Education (NGA-SCE)
Course: Corporate Finance
Internal Assignment Applicable for April 2023 Examination

Assignment Marks: 30

Instructions:
 All Questions carry equal marks.
 All Questions are compulsory
 All answers to be explained in not more than 1000 words for question 1 and 2 and for
question 3 in not more than 500 words for each subsection. Use relevant examples,
illustrations as far as possible.
 All answers to be written individually. Discussion and group work is not advisable.
 Students are free to refer to any books/reference material/website/internet for attempting
their assignments, but are not allowed to copy the matter as it is from the source of
reference.
 Students should write the assignment in their own words. Copying of assignments from
other students is not allowed.
 Students should follow the following parameter for answering the assignment questions.

1. Refer the published Balance Sheet of any listed Company. Identify its sources of funds.
Explain any 4 in brief. (Balance Sheet need not to be copied or pasted in the answer)
Compare and rank the sources identified with respect to their cost to the company (high,
low). Discuss your observation (10 Marks)

2. M/s Priya Industries Ltd. is evaluating 2 options of investments. Each one has the
following mentioned Cash Flows.
Evaluate the projects using: i) Pay-back period
ii) NPV
iii) IRR
(Show the calculations for each method.)
Which option you as the Chief Finance Officer of the Company would you select? Give
reasons.
(10 Marks)
Year A B
0 -40000 -50000
1 5000 8500
2 12000 15000
3 10000 12000
4 12500 12300
5 10500 10500

3. a. Sunil is valuating 2 investment proposals:
i) Invest Rs. 3 lacs for 5 years earn an interest of 8% compounded quarterly.
ii) Investment of Rs. 20,000 per year for 5 years @ 10% compounded quarterly.
Which option should he go for and why? (5 Marks)

3. b. Sanjana has a debenture of Par-value Rs. 100/- @ 6%. Calculate its current yield if:
(5 Marks)
i) Market Price is Rs. 98.20
ii) Market Price is Rs. 102.00
What inference can you draw from this about the relation between Market price and
yield?

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