II YEAR - ANUCDE

3. Discuss the various ratios which are helpful toassess the financial health of an organization.4. What is meant by capital structure? Explain themajor determinants of capital structure planning.5. What is cost of capital? Critically examine thedifferent approaches for computing cost of equity.6. The Nagarjuna & Co. Ltd. is examining thequestion of relaxing its credit policy. It sells atpresent 20,000 units at a price of Rs. 100 per unit,the variable cost per unit is Rs. 86 and the averagecost per unit at the current sales volume is Rs. 90.All the sales are on credit, the average collectionperiod being 36 days. A relaxed credited policy isexpected to increase sales by 10% and the averageof receivables to 60 days. Assuming 14% returnshould the firm relax its credit policy?7. A firm uses 1000 units of a product per year. Itscarrying cost per unit is Rs. 2/- and ordering costis Rs. 50/-. It takes 15 days to receive a shipmentafter an order is initiated and the firm intends tohold inventory for 20 days’ usage as a safety stock.Calculate the EOQ and reorder point.PART C — (15 marks)(Compulsory)8. GVK Company is considering the followinginvestment proposals.ProjectsCash flows (Rs.)2 (DBUS 21 (OR))