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Corporate Finance


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NMIMS Global Access

School for Continuing Education (NGA-SCE)

Course: Corporate Finance

Internal Assignment Applicable for April 2023 Examination

Assignment Marks: 30


All Questions carry equal marks. All Questions are compulsory

All answers to be explained in not more than 1000 words for question 1 and 2 and for question 3 in not more than 500 words for each subsection. Use relevant examples, illustrations as far as possible.

All answers to be written individually. Discussion and group work is not advisable.

Students are free to refer to any books/reference material/website/internet for attempting their assignments, but are not allowed to copy the matter as it is from the source of reference.

Students should write the assignment in their own words. Copying of assignments from other students is not allowed.

Students should follow the following parameter for answering the assignment questions.


For Theoretical Answer

Assessment Parameter Weightage
Introduction 20%
Concepts and Application related to the question 60%
Conclusion 20%

For Numerical Answer

Assessment Parameter Weightage
Understanding and usage of the formula 20%
Procedure / Steps 60%
Correct Answer & Interpretation 20%
  1. Calculate WACC with the following information. Which source of funding is most desirable and why? (10 Marks)

PQR Ltd. is coming out with a new equity issue of Rs. 10 lacs par value Rs. 100/share. The cost of issuing external equity is around 5%. Shareholders expect a return of 16% p.a. for the risk involved in parking their funds in PQR Ltd. PQR Ltd. also has retained earnings of Rs. 8 lacs as on date. It has a long term debt of Rs. 5 lacs taken at 8% p.a. Tax rate is @ 30% Preference shares capital of par value Rs. 6 lacs (Rs. 100 each), yield a return of 10% p.a. Market value of each equity share is Rs. 105 per share and that of Preference shares is Rs. 125/share.

  1. What is a Cash Cycle? Explain. Calculate using the following information. (Assume 360
days in a year). (10 Marks)
Opening Balances
Raw Material 1,00,000
WIP 45,000
Finishes Goods 1,35,000
Debtors 6,00,000
Creditors 8,60,000
Closing Balances
Raw Material 2,00,000
WIP 65,000
Finishes Goods 1,25,000
Debtors 5,45,000
Creditors 9,75,000
Costs Incurred during the year
Manufacturing Costs 11,60,000
Excise Duty 18,80,000
Selling and Distribution Expenses 6,20,000
Admin. Overheads 2,00,000
Total Sales 2,01,96,800
Total Purchases 1,46,00,000

40% of sales are on credit and 70% of purchases are on credit

(5 Marks)

  1. a. What is Net Working Capital? Explain each element briefly. Look at the following Balance sheet extract and identify each element of the working capital and calculate NWC.



  1. b. With the following data, calculate DSO and Debtor Turnover Ratio. Explain the
importance of each and make inferences. (5 Marks)
Rs. In Crores
FY 2021-22 FY 2020-21
Sales 1,01,000 87,255
Receivables 36,347 33,331
60% of the sales are on credit basis



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