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Vasvi was a student of Commerce in class XII. Her father was a farmer, who grew different varieties of wheat and was well versed about various aspects of wheat cultivation. He was also selected by the government for a pilot-project on wheat cultivation. As a project, she decided to study the feasibility of marketing good quality wheat at the reasonable price. Her father suggested to her to use the internet to gather customers’ views and opinions. She found that there was a huge demand for organic packed wheat. She knew that there were no pre-determined specifications in case of wheat, because of which it would be difficult to achieve uniformity in the output. To differentiate the product from its competitors, she gave it the name of ‘Mahan-organic wheat’ and classified it into three different varieties namely — Popular, Classic and Supreme, based on the quality. She felt that these names would help her in product differentiation.
Explain the three functions of marketing, with reference to the above paragraph
Concept: Financial Decisions> Financing Decision
Explain the following as factor affecting the requirements of fixed capital:
Choice of technique
Concept: Fixed Capital
Explain the following as factors affecting the requirements of fixed capital:
Technology upgradation
Concept: Fixed Capital
Explain the following as factors affecting the requirements of fixed capital:
Financing alternatives
Concept: Fixed Capital
Explain the following as factor affecting dividend decision:
Stability of dividends
Concept: Financial Decisions> Financing Decision
Explain the following as factor affecting dividend decision:
Shareholder's preferences
Concept: Financial Decisions> Financing Decision
Explain the following as factor affecting dividend decision:
Access to capital market
Concept: Financial Decisions> Financing Decision
Explain the following as factor affecting dividend decision:
Legal constraints
Concept: Financial Decisions> Financing Decision
What is meant by Financial Risk?
Concept: Concept of Financial Planning
Answer the following question.
State the objective of ' Financial Management '.
Concept: Concept of Financial Management
Give the meaning of 'Investment' and 'Financing' decisions of financial management.
Concept: Financial Decisions> Investment Decision
Explain the following as factors affecting the requirements of working capital:
Scale of operations
Concept: Fixed Capital
Give the meaning of ‘Investment’ and ‘Dividend’ decisions of financial management.
Concept: Financial Decisions> Financing Decision
| Ananta Ltd. is a company dealing in ready-made garments for the last many years. Recently the profit of the company has started increasing. The finance manager decided to retain the profit instead of distributing it among shareholders. |
- Identify and state the financial decision taken by the finance manager in the above case.
- State any three factors affecting the decision identified in (i) above.
Concept: Financial Decisions> Financing Decision
| Ravi has joined as a finance manager at MTA Ltd. He had to arrange funds of rupees one crore for the company. The Chief Executive Officer of the company wants to arrange the funds by a public issue whereas the finance manager wants to have a mix of debt and equity as this will determine the overall cost of capital and the financial risk of the enterprise. |
- Identify and give the meaning of the financial decision suggested by the finance manager in the above case.
- State any three factors affecting the decision identified in (i) above.
Concept: Financial Decisions> Financing Decision
|
NB Ltd. is India's largest manufacturer of cement. Its operations are spread throughout the country with 17 modern cement factories. It has a workforce of 9,000 people. Since its inception, the company has been a trendsetter in the cement industry. The company is planning to grow in the long run and wants to double its capacity in the next 3 years. For this, the Finance Manager has to decide about the quantum of finance to be raised from various long-term sources. For this, he needs to identify various available sources of funds and the proportion of funds from each source. |
- Identify the financial decision to be taken by the Finance Manager.
- State any four factors which would affect the decision identified in (i) above.
Concept: Financial Decisions> Financing Decision
| Myra Ltd. manufacturing televisions is planning to expand its business and requires ₹250 crores for the same. A number of projects are available for the company to invest in and each project has to be evaluated carefully. The Finance Manager of the company has assessed the projects in terms of the rate of return from each project and wanted to select the one with the higher rate of return. But before selecting the project he has to take into consideration other factors also. |
- Identify and state the financial decision discussed in the above paragraph.
- Explain the other factors that the Finance Manager should consider before selecting the project.
Concept: Financial Decisions> Investment Decision
‘Zenith Mall’ is a famous shopping mall in Mumbai, owned by ‘Pinnacle Group'. It is very popular for its international and national brands of fashionable clothes, restaurants, cinema halls and food courts.
The management of Pinnacle Group has decided to open a new branch of the mall in Pune. This decision was very crucial for the management as it involves huge amounts.
- Identify and state the financial decision involved in the above case.
- State any two factors affecting the decision identified in (i) above.
Concept: Financial Decisions> Investment Decision
| Harish is working as a finance manager in 'Kozee Softwares Ltd.' He has been awarded “Best employee of the year Award’ because of his foresightedness. He always aims at smooth operations of all the financial activities by focusing on fund requirements and their availability in the light of financial decisions. He takes into consideration the growth, performance, investments and requirement of funds for a given period so that financial resources are not left idle and don't unnecessarily add to the cost. |
By doing all this Harish strives to achieve the two main objectives of an important concept of financial management. Identify the concept and explain its two objectives.
Concept: Concept of Financial Planning
Mr. Sanjay Nehra was the Chairman of 'Taran Bank.' The bank was earning good profits. Shareholders were happy as the bank was paying regular dividends. The market price of their shares was also steadily rising. The bank was about to announce taking over of 'Vena Bank.' Mr. Sanjay Nehra knew that the share price of 'Taran Bank' would rise on this announcement. Being a part of the bank, he was not allowed to buy shares of the bank. He called one of his rich friends Sudhir and asked him to invest Rs 5 crores in shares of his bank promising him the capital gains. As expected the share prices went up by 40% and the market price of Suhir's shares was now Rs 7 crores. He earned a profit of Rs 2 crores. He gave Rs 1 crore to Mr. Sanjay Nehra and kept Rs 1 crore with himself. On regular inspection and by conducting enquiries of the brokers involved, Securities and Exchange Board of India (SEBI) was able to detect this irregularity. The SEBI imposed a heavy penalty on Mr. Sanjay Nehra.
By quoting the lines from the above para identify and state any two functions that were performed by SEBI in the above case.
Concept: Securities and Exchange Board of India (SEBI)
