NMIMS Corporate Finance Solved Assignment June 2023

Description

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

Assignment Marks: 30

Compute the NPV and IRR for project whose initial cost is 30,000 and cash inflows are
14000, 8200, 12000, 15000, 22000. Discount Rate is 10%. Cost of Capital if borrowed
is 15%.
Show value of NPV at IRR as discount factor.
Based on the above calculations, should the project be considered?
2. Calculate the Cash Cycle using the following information. (Assume 360 days in a year).
Opening Balances
Raw Material 4,00,000
WIP 80,000
Finished Goods 6,00,000
Debtors 2,50,000
Creditors 5,60,000
Closing Balances
Raw Material 5,00,000
WIP 70,000
Finished Goods 7,25,000
Debtors 3,15,000
Creditors 6,25,000
Costs Incurred during the year
Manufacturing Costs 10,45,000
Excise Duty 8,50,000
Selling and Distribution Expenses 4,20,000
Admin. Overheads 3,00,000
Total Sales 4,20,00,500
Total Purchases 3,23,00,000
30% of sales are on credit and 80% of purchases are on credit

3. a. In the following balance sheet calculate the Current Ratio and the Acid Test Ratio
(5 Marks)

3. b. Sanghvi & Sons P.Ltd. is a private limited company with almost 80% shareholding
with the Sanghvi family. It has now a requirement of Rs. 400 crores for a project to be
undertaken. Currently it has a debt-equity ratio of about 1.5:1. The management of the
NMIMS Global Access
School for Continuing Education (NGA-SCE)
Course: Corporate Finance
Internal Assignment Applicable for June 2023 Examination
company feels that a ratio of up to 2:1 is acceptable. Discuss whether the company
should fund its requirements by Debt or Equity and various considerations for the same.

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