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Timeallowed1hours
TotalMarks100
[N.B. The figures in the margin indicate full marks. Question must be answered in English. Examiner will
takeaccountofthequalityoflanguageandofthewayinwhichtheanswersarepresented.Different
parts,ifany,ofthesamequestionmustbeansweredinoneplaceinorderofsequence.]
Marks
1. a) DefineRiskandUncertainty.
3
b) Whatareupsideanddownsiderisks?
2
c) XYZ Ltd. has the opportunity to invest Tk.100,000 in a project. The project manager has
estimated three scenarios for the projects annual return, and the related returns and
probabilities. Please calculate expected return and advise if XYZ Ltd. should go for investing
with this project or keep the fund with fixed deposit @Tk.14% p.a. under the following
scenarios:
5
2.
3.
Scenario
Worstcasescenario
Mostlikelyscenario
Bestcasescenario
Probabilityofoccurring
0.2
0.7
0.1
Annualreturn
Taka
2,000
5,000
10,000
a) Whatisstrategicmanagement?Definedifferentlevelsofstrategy.
b) Whatarethebenefitsanddrawbacksofstrategicmanagementandplanning?
6
4
a)
b)
Definebalancedscorecard.
RamataxLimitedhasthefollowingdataintheirfinancialstatementsof31December,2010:
Equityshare@Tk.100pershare
Tk.50,000,000
Dividend
Tk.15,000,000
Marketpricepershare
Tk.150.00
Earningspershare
Tk.20.00
Fromtheaboveinformationpleasecalculatethefollowings:
i. Dividendpershare
ii. Dividendcover
iii. P/ERatio
iv. Dividendyield
4.
5.
2x4=8
(a) Whatisbusinessriskmanagement?
(b) Whenisriskmanagementnecessary?
(c) Howdoesbusinessriskmanagementwork?
2
4
4
SmartTradingLtd.hasthefollowingsalesandcollectioninformationfromtheirfinancialrecord:
SalesTk.20,000monthly
25%ofreceivablesarepaidwithinonemonth
70%arepaidwithintwomonths
5%ofreceivablesareneverpaid
SmartTradingproposesofferinga3%discounttoreceivablessettlinginvoiceswithinonemonth
oftheinvoicedate.Asaresult,monthlysalesarepredicatedtorisetoTk.25,000.
50%oftradereceivableswillpaywithinonemonth
44%willpaywithintwomonths
Irrecoverabledebtswillriseto6%.
[Pleaseturnover]
Allsalesareinvoicedattheendofeachmonth.Thediscountwillbeofferedforallinvoicesissued
fromMonth1.
CalculatehowmuchwilltotalcashinflowsfromtradereceivablesinMonths1and2changeasa
resultandwhatwillbetheeffectonprofit?
10
6. The following three companies have current financing structures which may be considered as
aggressive,averageanddefensive:
a) Calculatecurrentratioforallthreecompanies.
b) CalculateEPS.
c) Basiscurrentratio,EPSandotherfinancialdataanalyzestrengthandriskseparatelyforeach
company.
Balancesheet:
NonCurrentAssets
CurrentAssets
Total
Aggressive
Taka
50,000
50,000
100,000
Average
Taka
50,000
50,000
100,000
Defensive
Taka
50,000
50,000
100,000
30,000
70,000
100,000
50,000
20,000
30,000
100,000
50,000
40,000
10,000
100,000
15,000
(2,100)
12,900
(3,870)
9,030
15,000
(2,900)
12,100
(3,630)
8,470
15,000
(4,300)
10,700
(3,210)
7,490
2
2
6
7.
Equity(@Tk.100pershare)
10%LongTermDebt
CurrentLiabilities(averagecost3%)
Total
Incomestatement:
PBIT
Financecost
PBT
Tax@30%
Netprofitaftertax
Youarerequiredtocalculatethebreakevenpointinthefollowingcase:
10
ThefixedcostsfortheyearareTk.80,000;variablecostperunitforthesingleproductbeingmade
isTk.4.
Estimated sales for the period are valued at Tk.200,000. The number of unit involved coincides
withtheexpectedvolumeofoutput.EachunitsellsatTk.20.
8. a)
b)
c)
9. a)
b)
10. a)
b)
WhatdoyouunderstandbythetermInsidertradingofalistedcompanysshares.
Whatismarketabuse?
Whatisfraudulenttradingofaninsolventcompany?
4
3
3
WhywastheSarbanesOxleyActpassed?
Definecorporateresponsibilityforfinancialreports.
5
5
WhatisCorporateGovernance?
Describe the essential requirements of Audit Committee as advised by the SEC vide circular
ref.SEC/CMRRCD/2006158/Admin/0206tocomplywithcorporategovernance.
TheEnd