MMPF-2 2025-26 SOLVED ASSIGNMENT

Description

ASSIGNMENT
Course Code:MMPF – 002
Course Title:Capital Investment and Financing Decisions
Assignment Code:MMPF – 002/TMA/JULY/2025/JAN/2026

1. The Rising Sun Company requires Rs. 24 crores for installing a new assembly line. This investment is expected to yield an annual EBIT of Rs. 4 crores. The objective of investment by the company is to maximise the Earnings Per Share. Various alternatives which the company is considering are issuing of equity shares and raising a debt of either Rs. 4 crores, 6 crores or 20 crores. The current market price per share is Rs. 80. Which is expected to drop to Rs. 50 per share if the borrowing is in excess of Rs. 7.5 crores. Cost of borrowing are as follows:

. Assuming a tax rate of 35% work out EPS and the scheme which would meet the objectives of investment.

2. How are cash flows for Capital Budgeting estimated? Describe the different method used for evaluating investment proposals.
3. What is Project Risk? Describe the various techniques used for measuring and evaluating project risk.
4. Describe various non-traditional sources of Long Term Financing. Discuss their advantage over traditional sources of financing.
5. Discuss the factors contributing to Financial Engineering and describe Financial Engineering process.