Answer Happy

1) A) What are the Strategic, Tactical and Operational decisions of an organisation with respect to finance domain? Why this classification more relevant than classic classification of Investment, Financing and Dividend decisions? B) Explain the concept of Sustainable Growth Rate of a firm. What factors affect this rate for a single product firm? 2) A) A manufacturing firm is considering a four-year project with initial outlay of * 8,00,000. The scrap value of the asset so created is nil. The firm is expected to sell 2000 units of the output at 1200 per unit. The incremental cost of manufacturing these units is 800 per unit. The firm is enjoying tax exemption during the project life and has 15 percent cost of capital. Using sensitivity analysis, explain whether the project is more sensitive to selling price, sales volume or manufacturing cost? B) How will you choose between two mutually exclusive projects which do differs in terms of their useful life of operation? 3) A) What are implications of Bankruptcy costs and Agency costs in capital structure decision of the fiem? B) What is the Separation Principle? What are the main exceptions to the Separation Principle? 4) A) Compute the beta of the stock from the data given below: Years 3 Stock Return (%) -13 7 12 21 +7 Market Return (%) B) What do you understand by Asset Beta of a company? How does it differ from its Equity Beta? If cost of equity denends on Equity Beta, why does Asset Beta needed? Explain. biflam from operation is 6 4 5 1 2 6 14 2 14 18 9 9