Capital Investment and Financing Decisions PART II Very important Papers(50) Examine potentiality bonds as source of corporate financing.(51) Discuss the capital budgeting techniques without probabilities.(52) Describe the general formulation of a goal programming model.(53) What is meant by utility? Do you feel financial managers should be risk averse? Why or why not?(54) Why should we be concerned with risk in capital budgeting? Is the standard deviation an adequate measure of risk? Can you think of a better measure?(55) If project A has an expected value of net present value of Rs. 20,0000 and a standard deviation of Rs. 40000, is it more risky than project B, whose expected value is Rs. 140000 and standard deviation is Rs. 30000? Explain.?(56) (a) In a probability tree approach to project risk analysis, what are initial, conditional, and joint probabilities?(b) What are the benefits of using simulation to evaluate capital investment projects?(57) What is the purpose of control? To what is it directed?(58) What are the three main types of control systems? What questions should a control system answer?(59) What tools are available to the project manager to use in controlling a project? Identify some characteristics of a good control system?(60) What is the mathematical expression for the critical ratio? What does it tell a manager?(61) How might the project manager integrate the various control tools into a project control system?(62) How could a feedback control system be implemented in project management to anticipate client problems?(63) Define monitoring. Are there any additional activities that should be part of the monitoring function?(64) What are the most critical problems that arise in calculating a rate of return for a prospective investment?(65) What other factors in addition to rate of return analysis should be considered in determining capital expenditures? (66) What percentage of the total project effort do you think should be devoted to planning? Why?(67) Why do you suppose that the coordination of the various elements of the project is considered the most difficult aspect of project implementation?(68) What kinds of problem areas might be included in the project plan?(69) What is the role of systems integration in project management? What are the three major objectives of systems integration?(70) In what ways may the WBS be used as a key document to monitor and control a project?(71) What are the six component planning sequences of project planning?(72) Any successful project plan must contain nine key elements. List these items and briefly describe the composition of each?(73) What are the basic guidelines for systems design that assure that individual components of the system are designed in an optimal manner?(74) What are the general steps for managing each “work package” within a specific project?(75) Critically examine various theories of capital structure?(76) Narrate the factors influencing capital structure?(77) Explain the criteria for determining pattern of capital structure?(78)Discuss the relevance of debt-equity ratio for Indian Public Enterprises?(79) What is a firm’s capital structure? How is it different from financial structure?(80) Under the traditional approach to capital structure, what happens to the cost of debt and cost of equity as the firm’s financial leverage increases?(81) Explain ROI-ROE analysis?(82)Explain the EBIT-EPS approach to the capital structure. Are maximizing value and maximizing EPS the same?(83)Why is the cost of capital considered as the minimum acceptable rate of return on an investment?(84) How is the Cost of Debt Capital ascertained? Give examples.(85) How would you find the cost of capital for proprietorship or partnership firm? Can you thing of any ways to do this? List them.?(86) “Retained earnings are cost free” comment?(87) Discuss various uses of the concept of Cost of Capital?(88) Determine the cost of capital for the following securities?(89) Why is Time Value of Money independent of inflation and risk? Differentiate Present Value and Terminal Value?(90) What is Net Present Value? How is the NPV rule related to the wealth maximization objectives of a firm?(91) What is IRR ? How does it relate to financing decisions? Can you use it for investment decisions of the accept/reject type?(92) What is Investment Decisions? How is it different from financing decisions?(93) Bring out the factors influencing long-term financial decisions of the firm ?(94) ‘Obtaining Positive NPV implies the same thing as minimizing the cost of capital’ Explain with examples?
