NATIONAL OPEN UNIVERSITY OF NIGERIA
14-16 AHMADU BELLO WAY, VICTORIA ISLAND LAGOS
SCHOOL OF MANAGEMENT SCIENCES
OCTOBER/NOVEMBER 2014 EXAMINATION
Course Code: ACC415 Credit Units: 3
Course Title: FINANCIAL MANAGEMENT
Time Allowed: 2½ Hours.
Instructions: 1. Attempt Question 1 and any other three (3) Questions.
2. Question 1 is compulsory and carries 25 marks
while the other 3 Questions carry 15 marks each.
3. Show your calculations for appropriate marks
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NATIONAL OPEN UNIVERSITY OF NIGERIA
14-16 AHMADU BELLO WAY, VICTORIA ISLAND LAGOS
SCHOOL OF MANAGEMENT SCIENCES
OCTOBER/NOVEMBER 2014 EXAMINATION
Course Code: ACC415 Credit Units: 3
Course Title: FINANCIAL MANAGEMENT
Time Allowed: 2½ Hours.
Instructions: 1. Attempt Question 1 and any other three (3) Questions.
2. Question 1 is compulsory and carries 25 marks
while the other 3 Questions carry 15 marks each.
3. Show your calculations for appropriate marks
1a. Discuss and state the qualitative factors affecting capital investment decisions. 10marks
1b. Suppose a firm has to choose between two mutually exclusive projects that cost 193 million
each. The following are the possible net cash flows of the project and their associated
probabilities; viz:
Project X Project Y
Probability NCF Probability NCF
N000 N000
0.10 3,000 0.10 2,000
0.20 3,500 0.25 3,000
0.40 4,000 0.30 4,000
0.20 4,500 0.25 5,000
0.10 5,000 0.10 6,000
Determine the standard deviation and variance of each project and advise which of them is
preferable. 15marks
2a. Discuss the main sources of short-term finance. 6marks
b. State and explain the key factors which a company should consider when raising finance
through issue of loan stocks. 9marks
3a. Discuss the advantages of Convertible Loan Stock to the company. 10marks
b. Define warrant and list the salient features of a warrant. 5marks
4a. Assume Naylor Plc issues a zero-coupon debenture having a 12 year pull to maturity and par
value of #1000. If investors required rate of return is 15%. Find the value of the debenture.
10marks
b. What is a perpetual debenture? 5marks
5a. Describe the main types of finance lease. 6marks
b. State the advantages and one disadvantage of a lease arrangement to the lessee. 9marks
6. Discuss the views of the traditional approach to the impact of gearing on the value of the
company. 15marks
About National Open University of Nigeria, Lagos
National Open University of Nigeria (NOUN)
Overview:
The National Open University of Nigeria (NOUN) is Nigeria's foremost open and distance learning institution. Established in 1983 but suspended until 2002, NOUN was re-launched with a mission to provide flexible, accessible, and quality education to Nigerians. It operates under the auspices of the National Universities Commission (NUC) and offers a wide range of undergraduate and postgraduate programs across various disciplines.
Mission and Vision:
Mission: To provide affordable, flexible, and high-quality education to all Nigerians, leveraging open and distance learning methodologies.
Vision: To be the foremost institution providing accessible and quality education through open and distance learning in Nigeria and beyond.
Key Features and Distinctions:
Open and Distance Learning (ODL) Model: NOUN operates primarily through distance learning methods, allowing students to study from any location and at their own pace. This flexibility caters to working professionals, adults seeking education, and individuals unable to attend traditional on-campus programs.
Programs and Accreditation: NOUN offers a wide array of undergraduate and postgraduate programs in fields such as Arts, Social Sciences, Management Sciences, Health Sciences, Education, Law, and Agricultural Sciences. All programs are accredited by the NUC, ensuring they meet national educational standards.
Admission and Enrollment: Admission into NOUN is open to all qualified individuals, irrespective of their educational background or location. Prospective students apply online and are admitted based on the fulfillment of specified entry requirements for each program.
Learning Resources and Support: The university provides robust learning resources and support services tailored for distance learners. This includes online course materials, virtual classrooms, academic counseling, and access to physical study centers across Nigeria.
Examinations and Assessment: Students participate in periodic examinations conducted at designated centers nationwide. Assessments may include assignments, quizzes, and final examinations, all designed to evaluate students' understanding and mastery of course materials.
Research and Development: NOUN promotes research and scholarly activities among its faculty and students, contributing to knowledge creation and dissemination in various academic disciplines.
Community and Outreach: Beyond academic pursuits, NOUN is committed to community engagement and outreach initiatives aimed at promoting educational opportunities and societal development.
Accolades and Recognition:
NOUN has earned recognition both nationally and internationally for its pioneering efforts in open and distance learning, contributing significantly to the democratization of education in Nigeria.
Future Directions:
Moving forward, NOUN continues to expand its program offerings, enhance its learning technologies, and strengthen its academic partnerships to further its mission of providing accessible and quality education to Nigerians.
Conclusion:
The National Open University of Nigeria (NOUN) stands as a beacon of open and distance learning in Nigeria, offering flexible educational opportunities that cater to the diverse needs of its student population. With its commitment to quality, accessibility, and innovation, NOUN plays a vital role in shaping the educational landscape of Nigeria and beyond.
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