NMIMSGlobalAccess

SchoolforContinuingEducation(NGASCE)
Course:CorporateFinance
InternalAssignmentApplicableforSeptember2017Examination

AssignmentMarks:30

Instructions:

AllQuestionscarryequalmarks.
AllQuestionsarecompulsory.
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,
illustrationsasfaraspossible.
Allanswerstobewrittenindividually.Discussionandgroupworkisnotadvisable.
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
sourceofreference.

Students should write the assignment in their own words. Copying of assignments from
otherstudentsisnotallowed.

Studentsshouldfollowthefollowingparameterforansweringtheassignmentquestions.

ForTheoreticalAnswer ForNumericalAnswer
AssessmentParameter Weightage AssessmentParameter Weightage
Introduction 20% Formula 20%
ConceptsandApplication 60% Procedure/Steps 50%
relatedtothequestion
Conclusion 20% CorrectAnswer& 30%
Interpretation

Question 1 (10 Marks)

TATA Steels is looking forward for entering into a joint venture with United States Steel
Corporation in USA. The company is planning to access funds from the international
market. Discuss

NMIMSGlobalAccess
SchoolforContinuingEducation(NGASCE)
Course:CorporateFinance
InternalAssignmentApplicableforSeptember2017Examination
Meaning of the overseas sources of finance
Why the company wants to raise fund from international market?
Methods which can be employed by the company to raise fund from the
international market.
Is it advisable that company should go for Sourcing equity globally ?

Question 2 (10 Marks)

LIMBDI Ltd started a chain of hotels with profit maximization as the basic financial
objective and TEBDI Ltd started with a portfolio management company with the basic
objective as wealth maximization. In light of the relevant concepts of financial
management give your opinion on which company will surely survive in long run and
why?

Question 3
Kabra Motors is considering a proposal to install new machine. The initial capital outflow
will be 15 lacs. The expected cost of capital is 12 %. The expected cash inflows from the
operations will be as under-
year Cash inflows
1 2
2 3
3 4
4 5
5 5

NMIMSGlobalAccess
SchoolforContinuingEducation(NGASCE)
Course:CorporateFinance
InternalAssignmentApplicableforSeptember2017Examination

a) Calculate the NPV of the proposal. And give your opinion whether to accept or
reject the proposal. (5 Marks)

b) Calculate the profitability index and give your opinion whether to accept or
reject the proposal. (5 Marks)

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