1 Loan amount is Rs.500,000; term is 5 years; interest rate is 12%.

If the repayment is to be done on annually, find out the amount

of installment. Also prepare loan amortization table.

2 Game A - entry fee 5000 gain 2000 annually for 7 years

Game B - entry fee 7000 gain 20000 lumpsum after 7 years
which option is better if the required return is 10%?

3 You have bought a bike, Thunderbird, at an invoice price of Rs.230000.

 In addition to above, you have to pay Rs.30000 for the insurance, road
tax, and registration expenses.
You have Rs.20000 to pay towards this outlay. The balance is to be financed
by the bank desk at dealer's showroom - ICICI Bank. The bank has laid down
the following terms and conditions:
a Loan processing fee (upfront) 2000
b Tenure of proposed loan 42 months
c Annual interest rate charged by the bank 11.45% on reducing balance
d Monthly installment to start from now
Calculate the EMI assuming you have paid the processing fee and apply the
balance towards down payment to the dealer.
1 Two investment options yield an average of 12% and 14% returns
respectively. Their respective risk is measured in terms of their
standard deviations of 32% and 38%.
Which investment is better from risk-return perspective?

2 A mutual fund has given following information on its Net Asset Value
(NAV) in a time horizon of two years:
NAV (Rs. per unit)
Beginning point 100
end of year 1 200
end of year 2 100
Calculate the holding period return.

2 Weekly closing prices of RIL and NIFTY are given below. Calculate weekly SD, monthly SD, and
annual SD of both. Calculate beta of the company. Also calculate weekly and annual returns of
both. Interpret the results.
Date RIL NIFTY
1/7/2022 15:30 2436.00 17812.70
1/14/2022 15:30 2539.00 18255.75
1/21/2022 15:30 2477.85 17617.15
1/28/2022 15:30 2335.85 17101.95
2/4/2022 15:30 2331.30 17516.30
2/11/2022 15:30 2376.40 17374.75
2/18/2022 15:30 2424.40 17276.30
2/25/2022 15:30 2283.95 16658.40
3/4/2022 15:30 2325.55 16245.35
3/11/2022 15:30 2399.15 16630.45
3/17/2022 15:30 2481.70 17287.05
3/25/2022 15:30 2595.85 17153.00
4/1/2022 15:30 2655.85 17670.45
4/8/2022 15:30 2615.65 17784.35
4/13/2022 15:30 2551.65 17475.65
4/22/2022 15:30 2758.80 17171.95
4/29/2022 15:30 2790.25 17102.55
5/6/2022 15:30 2620.65 16411.25
5/13/2022 15:30 2426.60 15782.15
5/20/2022 15:30 2624.45 16266.15
 5/27/2022 15:30 2575.10 16352.45
6/3/2022 15:30 2779.50 16584.30
6/10/2022 15:30 2714.25 16201.80
6/17/2022 15:30 2590.00 15293.50
6/24/2022 15:30 2500.05 15699.25
7/1/2022 15:30 2408.70 15752.05
7/8/2022 15:30 2391.40 16220.60
7/15/2022 15:30 2401.80 16049.20
7/22/2022 15:30 2503.10 16719.45
7/29/2022 15:30 2509.45 17158.25
8/5/2022 15:30 2534.00 17397.50
8/12/2022 15:30 2633.00 17698.15
8/19/2022 15:30 2613.85 17758.45
8/26/2022 15:30 2618.00 17558.90
9/2/2022 15:30 2530.50 17539.45
9/9/2022 15:30 2569.30 17833.35
9/16/2022 15:30 2499.20 17530.85
9/23/2022 15:30 2439.50 17327.35
9/30/2022 15:30 2377.75 17094.35
10/7/2022 15:30 2432.35 17314.65
10/14/2022 15:30 2370.70 17185.70
10/21/2022 15:30 2471.60 17576.30
10/28/2022 15:30 2526.15 17786.80
11/4/2022 15:30 2592.75 18117.15
11/11/2022 15:30 2631.80 18349.70
11/18/2022 15:30 2597.65 18307.65
11/25/2022 15:30 2617.60 18512.75
12/2/2022 15:30 2722.15 18696.10
12/9/2022 15:30 2609.10 18496.60
12/16/2022 15:30 2565.60 18269.00
12/23/2022 15:30 2502.20 17806.80
12/30/2022 15:30 2547.20 18105.30
1/6/2023 15:30 2536.90 17859.45
1/13/2023 15:30 2467.60 17956.60
1/20/2023 15:30 2442.65 18027.65
1/27/2023 15:30 2337.35 17604.35
2/3/2023 15:30 2329.00 17854.05
2/10/2023 15:30 2336.65 17856.50
2/17/2023 15:30 2440.20 17944.20
2/24/2023 15:30 2383.70 17465.80
3/3/2023 15:30 2385.40 17594.35
3/10/2023 15:30 2322.70 17412.90
3/17/2023 15:30 2223.10 17100.05
 3/24/2023 15:30 2203.30 16945.05
3/31/2023 15:30 2331.05 17359.75
4/6/2023 15:30 2341.45 17599.15
4/13/2023 15:30 2355.50 17828.00
4/21/2023 15:30 2349.00 17624.05
4/28/2023 15:30 2420.50 18065.00
5/5/2023 15:30 2441.75 18069.00
5/12/2023 15:30 2484.35 18314.80
5/19/2023 15:30 2441.95 18203.40
5/26/2023 15:30 2506.50 18499.35
6/2/2023 15:30 2455.20 18534.10
6/9/2023 15:30 2481.95 18563.40
6/16/2023 15:30 2577.40 18826.00
6/23/2023 15:30 2514.75 18665.50
6/30/2023 15:30 2550.25 19189.05
7/7/2023 15:30 2633.60 19331.80
7/14/2023 15:30 2740.70 19564.50
7/21/2023 15:30 2538.75 19745.00
7/28/2023 15:30 2527.85 19646.05
8/4/2023 15:30 2509.55 19517.00
8/11/2023 15:30 2547.15 19428.30
8/18/2023 15:30 2556.80 19310.15
8/25/2023 15:30 2468.35 19265.80
9/1/2023 15:30 2412.65 19435.30
9/8/2023 15:30 2448.20 19819.95
9/15/2023 15:30 2457.85 20192.35
9/22/2023 15:30 2354.95 19674.25
9/29/2023 15:30 2345.00 19638.30
10/6/2023 15:30 2318.00 19653.50
10/13/2023 15:30 2349.30 19751.05
10/20/2023 15:30 2299.10 19542.65
10/27/2023 15:30 2265.80 19047.25
1 How much you will be willing to pay for a bond that has a face value of Rs.1000;
inerest Rs.85 annually; tenure 8 years; and your required return is 9%.

2 If a Rs.1000 face value bond is trading at Rs.944; having a maturity of 7 years;

and a coupon of 8.5%; what is the YTM of this bond?

3 If expected divided next year is Rs.3.60; growth rate 6%; and the cost of equity
12%; what is the value of the equity share?

4 Market price of share is Rs.150; dividend this year Rs.4; EPS Rs.15; book value
per share Rs.65; what is the cost of equity?
1 Year CF
1 22000 Cost of machine 100000
2 28000 Required return 12%
3 34000 Advise whether the machine should
4 42000 be acquired or not.
5 38000

Year CF
0 -100000
1 22000
2 28000
3 34000
4 42000
5 38000

2 A company is considering an investment project costing Rs.10 lakh.

The company's cost of capital is 10%. The project will be depreciated
at using SLM approach. At the end of the useful life of 8 years, the
salvage value is estimated at 5% of original cost. The annual EBITDA
is given in the following table:
Year EBITDA
1 42000
2 68000
3 81000
4 93000
5 78000
6 75000
7 69000
8 60000
If the applicable tax rate is 35%, calculate the NPV of the project.
Give your recommendation on the acquisition of the project.

Initial outlay 1000000 Tax 35% Useful life 8

Dep rate 32.23% Salvage 5% CoC 10%
A Company has the following capital structure:
Source B/S value Cost
Debt:
Bonds 5000000 9.50% before tax
Equity capital 10000000 20.00% dividend paid this year
Retained earning 20000000
Pref Sh capital 5000000 10.75% total 5000 shares
40000000
Bonds are trading at a total market value of 4640000; equity share
price is currently Rs.20 (face value Rs.10) and Pref is Rs.910. Risk-free
rate of return and market risk premium are 7.2% and 8.3%, respectively.
If the beta of the company is 1.12 and tax rate is 35%, find out the WACC.
A company has 1 crore shares oustanding with a face value of Rs.10
per share. Last year's profit before tax was Rs.2.5 crore. The tax rate
is 35%. The company is contemplating to embark on an expansion
plan that will cost Rs.5 crore. The finance manager is considering the
following financing plans - (a) selling adequate number of equity shares
at Rs.25 per share; (b) borrowing the required amount at 12%; (c ) 50%
of the requirement via issuing 11% preference shares and the balance
from borrowing as per (b) above; or (d) 50% via issue of equity shares as
per (a) above, and balance via borrowing as per (b) above.
The profit before interest and tax is estimated to be Rs.3.75 crore
after the expansion plan. Using EBIT-EPS analysis, suggest the best
financing plan for the expansion.
1 Calculate growth in EPS and DPS using various methods.
EPS DPS
Year (Rs) (Rs)
2005 13.9 5.3
2006 15.9 5.9
2007 16.4 6.5
2008 18.4 7.4
2009 19.8 8.3
2010 23.6 9.4
2011 24.7 10.5
2012 25.9 11.5
2013 27.8 13.0
2014 30.7 14.2
2015 30.1 15.1
2016 31.2 15.9
2017 33.9 17.2
2018 34.9 19.1
2019 81.8 21.6
2020 44.9 23.5
2021 53.6 80.5
2022 36.5 28.2
Following is the extract from the financial statements of
Lall Ltd, a leading manufactuere of iron and steel:
2023 2022
Sales 750
Gross profit 150
Sundary debtors 59 55
Sundary creditors 39 36
Closing stock 42 38
Compute operating and cash cycles. All rupees are in lakh.
Clearly mention any assumption that you make.
EF Ltd has reported following annual figures:
Sales (5 weeks credit is allowed) Rs.39,00,000 pa
Material consumed (suppliers extend one and a half months credit) Rs.9,00,000 pa
Wages paid (three weeks in arrears) Rs.7,20,000 pa
Manufacturing expenses outstanding at year end (paid one month in arrear) Rs.50,000
Total administrative expenses, paid as above Rs.2,10,000 pa
Sales promotion expenses, paid quarterly in advance Rs.1,00,000 pa
The company sells its products at a gross profit of 25% taking depreciation as part of cost
of production. It keeps one month’s stock of raw materials and a fortnight's finished goods.
A cash balance of Rs.10,000 is assumed. Taking a contingency margin of 10%, calculate the WC
requirements of the company on cash cost basis. Ignore work-in-progress.
Forecast cost sheet of a firm provides following data:
Costs per unit ~
Raw material 52
Direct labour 19.5
Overheads 39
Total cost 110.5
Profit 19.5
Selling price 130
Additional information:
Average raw material in stock - one month
Average materials in process - half a month
Credit allowed by suppliers - one and a quarter of a month
Credit allowed to customers - one and a half month
Time lag in payment of wages - two weeks
Time lag in payment of overheads - three weeks
One fourth sales are in cash; cash balance to maintain is Rs. 1 lakh
You are required to prepare a statement showing the working
capital needed to finance a level of activity of 70000 units of output.