p.m. per child for 4 children; medical allowance Rs.400 p.m.; transport allowance
Rs.1,150 p.m. (out of which Rs.900 p.m. is used for covering the journey between
office and residence and Rs.250 p.m. is used for other purposes).
Besides, he gets Rs.4,500 p.m. as house rent allowance up to November 30, 2001
(Rent paid at Ghaziabad, Rs.5,500 p.m.). With effect from December I, 2001, he
has been provided a furnished flat by the Employer at Delhi (rent paid by
employer Rs.7,500 p.m.; rent of furniture provided Rs.500; rent recovered from X
Find out the salary chargeable to tax for the assessment year 2002-03 [ignore
standard deduction on the assumption that with effect from January I, 2002 he
joins a part-time employment with B Ltd. (Salary Rs.2,000 p.m.) with the
permission of A Ltd. without leaving the job of A Ltd.]
SECTION - B
5. Answer any three of the following in not more than 200 words each:
(a) What is under Capitalization ? 20
(b) Discuss the relevance of cost of capital in capital budgeting. 20
(c) Describe the organisation, growth and weaknesses of stock exchanges in
India. 20 (d) In what ways dividend policy and retention of earnings related to
financing of firms business?
6. (a) Critically examine the functions of a Financial Manager in a large scale
industrial establishment. 30 (b) Each of the three projects A, B, C requires an
investment of Rs. 20,000. Their life is 5 years and cash inflows are as under.
Year Cash Inflows
A B C
Rs. Rs. Rs.
1 4,000 5,000 6,500
2 4,000 5,000 5,000
3 5,000 5,000 4,500
4 6,500 5,000 4,000
5 5,000 5,000 5,000
Using the Pay Back and Net Present Value methods, determine the ranking of the
projects. The discount rate is 10%.
Note: The present value of Re. 1 at the discount rate of 10% is as follows:
Year 1 2 3 4 5
Present value .909 .826 .751 .683 .621
7. (a)"Ratio-analysis is a tool to examine the health of a firm." Elucidate.
(b) A proforma cost sheet of a company provides the following particulars:
Elements of cost: Material 40%, Direct Labour 20%, Overheads 20%.
The following further particulars are available:
(a) It is proposed to maintain a level of activity of 2,00,000 units.