Q.

l

(a)

Explain the following

i) Sensitivity Analysis m Capital budgeting n) Implications of Corporate P.estructuring

07

(b)

Sunl Ltdhas the beginmng of a period 100000 eąuity shares of Rs 10 each and 12% long term debt of Rs 10.00,000 The finance department of the company has generated the following forecast statistics for the penod ROTA 25%

Debt Ratio: 0 90 EIR 10%

Current Assets to Fixed Assets 0 55 1 TaxTate 40%

The assets. Liabilities and equity figures used to compute the above financial statistics are based on forecast period end Balance The company has no plan to change lts eąuity Capital and long term debt You are reąuired to

1    Prepare forecast Balance sheet

2    Forecast EPS

07

Q.

2

(a)

The Balance sheet of Arav Limited as on 31^Jt March, 2010 is as follows:

07

Liabilities

Rs. Lakhs

Assets

Rs. Lakhs

Share Capital

3200

Fixed Assets

7200

P.eserves

2400

Inventories

4000

Long term Debt

5600

P.eceivables

3200

Short Term Debt

3200

Cash and Bank

1600

Payables

800