If you are a BCom 4th Semester student of Gauhati University under the NEP FYUGP curriculum, here we bring you the official question paper for Fundamentals of Financial Management (BCM0400104) for the year 2025. This paper is very useful for students preparing for upcoming examinations, as it helps to understand the exam pattern, marking scheme, and the type of questions asked.
📌 Paper Details
- University: Gauhati University
- Course: B.Com (NEP FYUGP)
- Semester: 4th Semester
- Paper Code: BCM0400104
- Subject: Fundamentals of Financial Management
- For: Accounting / Finance / Human Resource Major
- Full Marks: 60
- Time: 2½ hours
- Year: 2025
📖 About Gauhati University BCom 4th Sem. Fundamental of Financial Management Question Paper 2025
The Fundamentals of Financial Management paper covers key concepts of financial decision-making, capital budgeting, cost of capital, financial planning, working capital management, and dividend policies. By practicing this question paper, students can strengthen their exam preparation and get a clear understanding of the question distribution in the Gauhati University B.Com examinations.
Gauhati University BCom 4th Sem. Fundamental of Financial Management Question Paper 2025
2025
ACCOUNTING / FINANCE / HUMAN RESOURCE
Paper : BCM0400104
(Fundamentals of Financial Management)
Full Marks : 60
Time : 2½ hours
The figures in the margin indicate full marks for the questions.
Q.1. Answer as directed : (1×8=8)
(i) Which of the following best represents the concept of the time value of money?
(a) Money losses value over time due to inflation.
(b) A rupee today is worth more than a rupee in the future.
(c) Money has no time relevance.
(d) Interest rate fluctuations determine investment decisions.
(ii) The cost of capital is important in financial decision-making because—
(a) It helps calculate working capital.
(b) It determines the maximum return on investment.
(c) It is used as a benchmark for investment appraisal.
(d) It is needed for inventory management.
(iii) The __________ decision involves determining how much profit should be retained in the business.
(iv) A firm with higher operating leverage will have lower business risk. (True or False)
(v) When a project should be accepted under Profitability Index (PI)?
(a) When PI > 1.0
(b) When PI < 1.0
(c) When PI = 0
(d) None of the above
(vi) Shareholders are the creditors of the company. (True or False)
(vii) Capitalisation, Capital Structure and Financial Structure means the same. (True or False)
(viii) Greater the size of a business unit __________ will be the requirements of working capital.
Q.2. Answer any six from the following questions : (2×6=12)
(i) How does the concept of Financial Management influence decision-making within a firm?
(ii) Define Capital Rationing.
(iii) State any two differences between Net Present Value (NPV) and Internal Rate of Return (IRR).
(iv) Explain the concept of operating cycle in working capital management.
(v) A company issues 1000 equity shares of Rs. 100 each at a premium of 10%. The company has been paying 20% dividend to equity shareholders for the past five years and expects to maintain the same in the future also. Compute the cost of equity capital. Will it make any difference if the market price of equity share is Rs. 160?
(vi) Why might a company prefer internal financing over external financing?
(vii) What is meant by permanent working capital?
(viii) Explain the role of a financial manager in investment decision.
(ix) Define Pay-out Ratio.
(x) Explain the term optimal capital structure.
Q.3. Answer any four from the following questions : (5×4=20)
(i) Explain the three major decisions in financial management with suitable examples.
(ii) Elucidate the capital budgeting process.
(iii) Assume a business is planning to expand its operations. What long-term sources of finance could it consider and how should it decide among them?
(iv) Discuss in detail the Gordon's model of relevance of dividend policy to the valuation of an entity.
(v) A 5-year Rs. 100 debenture of a firm can be sold for a net price of Rs. 96.50. The coupon rate of interest is 14% per annum, and the debenture will be redeemed at 5% premium on maturity. The firm's tax rate is 40%. Compute before-tax and after-tax cost of debenture.
(vi) State the meaning of risk and return. Analyse the risk and return relationship in taking investment decision.
(vii) Explain the various factors which influence the dividend decisions of a firm.
(viii) What is meant by aggressive approach to financing of working capital?
Q.4. Answer any two from the following questions : (10×2=20)
(a) Effective financial management requires clear and measurable objectives that aligns with the overall goals of the business. In this context, discuss what are the primary objectives of financial management and how do they help in achieving the firm's success.
(b) A choice is to be made between two competing proposals which require an equal investment of Rs. 50,000 and are expected to generate net cash flows as under:
The cost of capital is 10%.
Which project should be chosen under—
(a) Payback period
(b) NPV method
And comment on the results.
(c) Firms often follows different approaches to decide their capital mix. According to it what is meant by capital structure? Explain any two capital structure theories with their key assumptions and conclusions.
(d) Discuss the various forms of dividends. What are the assumptions and criticisms of M. M. (Miller and Modigliani) hypothesis under dividend policy.
(e) What factors would you take into consideration in estimating the working capital needs of a concern?
📂 Gauhati University Fundamental of Financial Management Question Paper 2025 (NEP FYUGP)
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✅ Why Use Previous Year Papers?
- Helps in understanding the exam pattern and structure.
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- Boosts confidence through practice.
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