MMPF-001 Working Capital Management Solved Question Paper June 2023

MMPF-001 Working Capital Management Solved Question Paper June 2023

Working Capital Management
Course Code: MMPF-001

1. Define working capital and discuss the different
components of working capital.
2. What is the role of Central Bank in designing
and implementing monetary and credit policy ?
Discuss the Cash Reserve Ratio (CRR) and
Statutory Liquidity Ratio (SLR) in detail.
3. What do you understand by the term ‘Cash
Management’ ? Why do firms hold cash and
marketable securities ?
4. Explain the following :
(a) Bierman-McAdams optimisation model
(c) Miller and Orr model.
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5. Explain the meaning and significance of trade
credit. Discuss the various factors that
determine trade credit.
6. What do you understand by ‘Term Loans’ ?
Discuss the purposes for which they are
granted by banks.
7. Explain the financing options accessible to
large and small firms. Discuss the reasons for
differences in access to working capital finance
for SMEs and large companies.
8. Two components X and Y are used as follows :
Normal usage = 50 units each per week
Minimum usage = 25 units each per week
Maximum usage = 75 units each per week
Re-order quantity = X–300 units
Y–500 units
Re-order period = X–4 to 6 weeks
Y–2 to 4 weeks
You are required to calculate for each
component :
(a) Reorder level
(b) Minimum level
(c) Maximum level
(d) Average stock level