INTERMEDIATE EXAMINATION SET 1

MODEL QUESTION PAPER TERM – DEC 2024

PAPER – 11 SYLLABUS-2022
FINANCIAL MANAGEMENT AND BUSINESS DATA ANALYTICS

Time Allowed: 3 Hours Full Marks: 100

The figures in the margin on the right side indicate full marks.

SECTION – A (Compulsory)
1. Choose the correct option: [15 x 2 = 30]

(i) ______ represents that portion of Total Risk which is attributable to factors that affect
the market as a whole.
(a) Systematic Risk
(b) Unsystematic Risk
(c) Purchasing Power Risk
(d) None of the above

(ii) If the rate of interest is 12%, what are the doubling periods as per the rule 72 and the
rule of 69 respectively?
(a) 5 Years and 5.2 Years
(b) 5.8 Years and 5.3 Years
(c) 6 Years and 6.1 Years
(d) 6.5 Years and 6.6 Years

(iii) The first computerised online stock exchange in India was:

(a) NSE
(b) OTCEI
(c) BSE
(d) MCX

(iv) What is the value of a levered firm L Ltd. if it has the same EBIT as an unlevered firm
U Ltd., (with value of ₹ 700 lakh), has a debt of ₹ 200 lakh, tax rate is 35% under M-
M approach?
(a) ₹ 770 Lakh
(b) ₹ 500 Lakh
(c) ₹ 630 Lakh
(d) ₹ 900 Lakh

(v) Higher net working capital leads to ___________ (higher / lower) liquidity and higher
profitability.
(a) Higher
(b) Lower
(c) No Changes in
(d) None of the above

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Directorate of Studies, The Institute of Cost Accountants of India
 INTERMEDIATE EXAMINATION SET 1
MODEL QUESTION PAPER TERM – DEC 2024
PAPER – 11 SYLLABUS-2022
FINANCIAL MANAGEMENT AND BUSINESS DATA ANALYTICS

(vi) T Ltd. requires ₹ 3 million in cash for meeting its transaction needs over the next 6
months, its planning horizon for liquidity decision. The company currently has the
amount in the form of marketable securities. The cash payment will be made evenly
over the six month period. T Ltd. earns 12% annual yield on its marketable securities.
Conversion and marketable securities into cash entails a fixed cost of ₹ 1000 per
transaction. What will be the optimal conversion size as per Baumol model of cash
management?
(a) ₹ 315,628
(b) ₹ 316,228
(c) ₹ 317,678
(d) ₹ 318,426

(vii) SISFS stands for _______________.

(a) Start-up India Seed Fund Strategy
(b) Start-up India Seed Financial Strategy
(c) Start-up India Seed Financial Scheme
(d) Start-up India Seed Fund Scheme

(viii) The following information is given for a project:

Annual cash inflow ₹ 8,00,000, Useful life 4 years. Payback period 2.855 years.
The cost of the project would be -
(a) ₹ 22,80,000
(b) ₹ 22,84,000
(c) ₹ 22,86,000
(d) ₹ 22,87,800

(ix) Every debt instrument has _________________.

(a) A face value
(b) A maturity value
(c) A face value as well as a maturity value
(d) Liquidity value

(x) If the current ratio is 2.4:1 and working capital is ₹ 25,20,000, find the amount of
current assets and current liabilities.
(a) Current Assets ₹ 43,20,000 and Current Liabilities ₹ 18,00,000
(b) Current Assets ₹ 44,00,000 and Current Liabilities ₹ 18,50,000
(c) Current Assets ₹ 45,50,000 and Current Liabilities ₹ 19,00,000
(d) Current Assets ₹ 46,60,000 and Current Liabilities ₹ 19,30,000

(xi) A project has a 10% discounted payback of 2 years with annual after-tax cash inflows
commencing from year end 2 to 4 of ₹400 lakh. How much would have been the initial
cash outlay which was fully made at the beginning of year 1?
(a) ₹ 400 lakh
(b) ₹ 422 lakh
(c) ₹ 452 lakh

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Directorate of Studies, The Institute of Cost Accountants of India
 INTERMEDIATE EXAMINATION SET 1
MODEL QUESTION PAPER TERM – DEC 2024
PAPER – 11 SYLLABUS-2022
FINANCIAL MANAGEMENT AND BUSINESS DATA ANALYTICS

(d) ₹ 497.20 lakh

(xii) XBRL is the abbreviated form of:

(a) eXtensible Business Reporting Language
(b) eXtensive Business Reporting Language
(c) eXtended Business Reporting Language
(d) eXtensive Business Reporting Language

(xiii) The geometric distribution is a discrete distribution that assesses:

(a) the probability of the occurrence of the first success
(b) the probability of the occurrence of the second success
(c) the probability of the occurrence of the third success
(d) the probability of the occurrence of the less success

(xiv) A scatter plot displays several unique data points:

(a) On a single graph.
(b) On two different graphs
(c) On four different graphs
(d) None of the above.

(xv) If a firm has a DOL of 2.8, it means:

(a) If sales increase by 2.8%, the EBIT will increase by 1%
(b) If EBIT increase by 2.896, the EPS will increase by 1%
(c) If sales rise by 1%, EBIT will rise by 2.8%
(d) None of the above.

SECTION – B
(Answer any five questions out of seven questions given. Each question carries 14 Marks.)
[5x14=70]

2. (a) Explain the Registration requirement of NBFCs’. Describe what is residuary Non-
Banking Company (RNBC). [7]

(b) Describe the data mining. Explain the applications of data mining techniques in
finance and management. [7]

3. (a) The following is the summary of Financial Ratios and form of a Textile Company
having a sale of ₹ 32 lakh:
Sales to net worth (times) 2.3
Current debt to net worth (%) 42
Total debt to net worth (%) 75

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Directorate of Studies, The Institute of Cost Accountants of India
 INTERMEDIATE EXAMINATION SET 1
MODEL QUESTION PAPER TERM – DEC 2024
PAPER – 11 SYLLABUS-2022
FINANCIAL MANAGEMENT AND BUSINESS DATA ANALYTICS

Current ratio(times) 2.9

Net sales to inventory (times) 4.7
Fixed asset to net worth (%) 53.2

Performa Balance Sheet (Amount in `)

Net worth -------- Fixed assets -----
Long –term debt -------- Cash -----
Current debt -------- Stock -----
Sundry debtors 5,68,889
----- -----
Calculate the missing amount of Performa balance sheet. [7]

(b) The following is the Balance Sheet of Gama Limited for the year ending March 31,
2023 and March 31, 2024:
Balance Sheet as on 31st March
Particulars 2023 (₹) 2024 (₹)
Capital and Liabilities:
Share Capital 6,75,000 7,87,500
General Reserves 2,25,000 2,81,250
Capital Reserve (Profit on Sale of – 1,12,500 11,250
Investment)
Profit & Loss Account 3,37,500 2,25,000
15% Debentures 11,250 2,25,000
Accrued Expenses 1,80,000 13,500
Creditors 33,750 2,81,250
Provision for Dividends 78,750 38,250
Provision for Taxation 85,500
Total 16,53,750 19,48,500
Assets:
Fixed Assets 11,25,000 13,50,000
Less: Accumulated depreciation 2,25,000 2,81,250
Net Fixed Assets 9,00,000 10,68,750
Long – Term Investments (at cost) 2,02,500 2,02,500
Stock (at cost) 2,25,000 3,03,750
Debtors (net of provision for doubtful debts 2,53,125 2,75,625
of ₹ 45,000 and ₹ 56,250 respectively for
2023 and 2024 respectively)
Bills receivables 45,000 73,125
Prepaid Expenses 11,250 13,500
Miscellaneous Expenditure 16,875 11,250
Total 16,53,750 19,48,500

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Directorate of Studies, The Institute of Cost Accountants of India
 INTERMEDIATE EXAMINATION SET 1
MODEL QUESTION PAPER TERM – DEC 2024
PAPER – 11 SYLLABUS-2022
FINANCIAL MANAGEMENT AND BUSINESS DATA ANALYTICS

Additional Information:
1. During the year 2023-24, fixed assets with a net book value of ₹ 11,250
(accumulated depreciation, ₹ 33,750) was sold for ₹ 9,000.
2. During the year 2023-24, Investments costing ₹ 90,000 were sold, and also
Investments costing ₹ 90,000 were purchased.
3. Debentures were retired at a Premium of 10%.
4. Tax of ₹ 61,875 was paid for 2022-23.
5. During the year 2023-24, bad debts of ₹ 15,750 were written off against the
provision for Doubtful Debt account.
6. The proposed dividend for 2022-23 was paid in 2023-24.
Prepare a Funds Flow Statement (Statement of changes in Financial Position on
working capital basis) for the year ended March 31, 2024. [7]

4. (a) The following are the Balance Sheets of Maharaj Ltd. as on 31.03.23 and 31.03.24:
Particulars 31.03.23 (₹) 31.03.24 (₹)
Current Assets:
Cash and Bank Balance 23,600 2,000
Debtors 41,800 38,000
Inventory 32,000 26,000
Other Current Assets 6,400 2,600
Total Current Assets (A) 1,03,800 68,600
Fixed Assets :
Land and Building 54,000 34,000
Plant and Machinery 62,000 1,57,200
Furniture 5,800 9,600
Total Fixed Assets (B) 1,21,800 2,00,800
Long-term Investment (C) 9,200 11,800
Total Assets (A + B + C) 2,34,800 2,81,200
Current Liabilities (D) 52,400 25,400
Long-term Debt (E) 40,000 65,000
Owners’ Equity:
Equity Share Capital 80,000 1,20,000
Reserve and Surplus 62,400 70,800
Total Owners’ Equity (F) 1,42,400 1,90,800
Total Liabilities and Capital (D + E + F) 2,34,800 2,81,200
Prepare Comparative Balance Sheets and study its financial position. [7]

(b) Jamia Ltd. has on its book the following amounts and specific costs of each type
of capital:
Type of capital Book value (`) Market value (`) Specific cost (%)
Debt 8,00,000 7,60,000 5

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Directorate of Studies, The Institute of Cost Accountants of India
 INTERMEDIATE EXAMINATION SET 1
MODEL QUESTION PAPER TERM – DEC 2024
PAPER – 11 SYLLABUS-2022
FINANCIAL MANAGEMENT AND BUSINESS DATA ANALYTICS

Preference 2,00,000 2,20,000 8

Equity 12,00,000 18,00,000 15
Retained earnings 4,00,000 6,00,000 13
26,00,000 33,80,000
Calculate the weighted average cost of capital using book and market value
weights. [7]

5. (a) A plastic manufacturer has under consideration the proposal of production of high
quality plastic bowl. The necessary equipment to manufacture the bowl would cost
₹ 2 lakhs and would last 5 years. The tax relevant rate of depreciation is 20% on
written down value. There is no other asset in the block. The expected salvage is ₹
20,000. The bowl can be sold at ₹ 4 each. Regardless of the level of production, the
manufacturer will incur cash cost ₹ 50,000 each year if the project is undertaken.
The overhead costs allocated to this new line would be ₹ 10,000. The variable costs
are estimated at ₹ 2 per bowl. The manufacturer estimates it will sell about 1,50,000
bowl per year ; the tax rate is 35% .
Advice the management whether the proposed equipment should be purchased or
not. Assume 20% cost of capital and additional working capital requirement,
₹1,00,000. [7]

(b) A limited company is considering investing a project requiring a capital outlay of

2,00,000. Forecast for annual income after depreciation but before tax is as follows:
Year (₹)
1 1,00,000
2 1,00,000
3 80,000
4 80,000
5 40,000
Depreciation may be taken as 20% on original cost and taxation at 50% of net
income. You are required to evaluate the project according to each of the following
methods:
1. Payback period method
2. Rate of return on original investment method
3. Rate of return on average investment method
4. Discounted cash flow method taking cost of capital as 10%
5. Net present value index method
6. Internal rate of return method.
7. Modified internal rate of return method. [7]

6. (a) Calculate “Maximum Bank Borrowings” permissible under Method I, II & III of
Tandon Committee norms from the following figures and Analyse each method.

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Directorate of Studies, The Institute of Cost Accountants of India
 INTERMEDIATE EXAMINATION SET 1
MODEL QUESTION PAPER TERM – DEC 2024
PAPER – 11 SYLLABUS-2022
FINANCIAL MANAGEMENT AND BUSINESS DATA ANALYTICS

Current Liabilities ₹ in lakh Current Assets ₹ in lakh

Creditors for purchases 200 Raw materials 400
Other current liabilities 100 300
Bank borrowings including 400 Work in progress 40
bills discounted with bankers
Finished goods 180
Receivable including 100
bills discounted with
bankers

Other current assets 20

Total 700 740
Assume core current assets are ₹190 lakhs. [7]

(b) A firm is considering pushing up its sales by extending credit facilities to the
following categories of customers:
(i) Customers with a 10% risk of non-payment, and
(ii) Customers with a 30% risk of non-payment.
The incremental sales expected in case of category (i) are ₹ 40,000 while in case
of category (ii) they are ₹ 50,000. The cost of production and selling costs are 60%
of sales while the collection costs amount to 5% of sales in case of category (i)
and 10% of sales in case of category (ii).
Examine and analyze whether the firm has to extend credit facilities to each of the
above categories of customers. [7]

7. (a) Bangabasi Ltd. belongs to a risk-class for which the appropriate capitalisation rate
is 10%. It currently has outstanding 2000 equity shares of ₹100 each. The firm is
contemplating the declaration of dividend of ₹8 per share at the end of the current
financial year. It expects to have net earnings of ₹20,000 and has a proposal for
making new investment of ₹24,000. Examine and show that under the Modigliani–
Miller assumption, the payment of dividend does not affect the value of the firm.
[7]
(b) Calculate the operating leverage for each of the four firms P,Q,R and S from the
following price and cost data. Analyze the relationship between levels of fixed
costs and the resulting degree of operating leverage? Assume number of units sold
is 10,000.
Particulars Firms
P Q R S
Sales price per unit ₹20 ₹32 ₹50 ₹70

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Directorate of Studies, The Institute of Cost Accountants of India
 INTERMEDIATE EXAMINATION SET 1
MODEL QUESTION PAPER TERM – DEC 2024
PAPER – 11 SYLLABUS-2022
FINANCIAL MANAGEMENT AND BUSINESS DATA ANALYTICS

Variables cost per unit ₹6 ₹16 ₹20 ₹50

Fixed operating cost ₹1,60,000 ₹80,000 ₹4,00,000 Nil
[7]

8. (a) Describe Quantitative Financial Data and Qualitative Financial Data. Explain
Nominal Scale and Ratio Scale in the context of types of data. [7]

(b) Describe how we can do data Visualisation in the right way. [7]

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Directorate of Studies, The Institute of Cost Accountants of India