Exm 3148 1 
National Institute of Business Management
Chennai - 020
EMBA/ MBA
Elective: Financial Management (Part - 2)
Attend any 4 questions. Each question carries 25 marks
(Each answer should be of minimum 2 pages / of 300 words)
1. Discuss the main sources of capital to finance capital expenditure.
2. Explain the factors considered as regards to a company’s decision to use debt or equity.
3. Describe the advantages of Leasing.
4. Describe the concept of Working Capital.
5. Explain the techniques designed to accelerate the collection of accounts receivable.
6. Write a detailed account on Holding Company Accounts.
25 x 4=100 marks
1. Discuss the main sources of capital to finance capital expenditure.
DEFINITION OF 'CAPITAL EXPENDITURE (CAPEX)'
Capital expenditure, or CapEx, are funds used by a company to acquire or upgrade physical assets such as property, industrial buildings or equipment. It is often used to undertake new projects or investments by the firm. This type of outlay is also made by companies to maintain or increase the scope of their operations. These expenditures can include everything from repairing a roof to building, to purchasing a piece of a equipment, or building a brand new factory.
In terms of accounting, an expense is considered to be a capital expenditure when the asset is a newly purchased capital asset or an investment that improves the useful life of an existing capital asset. If an expense is a capital expenditure, it needs to be capitalized. This requires the company to spread the cost of the expenditure (the fixed cost) over the useful life of the asset. If, however, the expense is one that maintains the asset at its current condition, the cost is deducted fully in the year of the expense.
Capital expenditure should not be confused with revenue expenditure or operating expenses (OPEX). Revenue expenses are shorter-term expenses required to meet the ongoing operational costs of running a business, and therefore
Chennai - 020
EMBA/ MBA
Elective: Financial Management (Part - 2)
Attend any 4 questions. Each question carries 25 marks
(Each answer should be of minimum 2 pages / of 300 words)
1. Discuss the main sources of capital to finance capital expenditure.
2. Explain the factors considered as regards to a company’s decision to use debt or equity.
3. Describe the advantages of Leasing.
4. Describe the concept of Working Capital.
5. Explain the techniques designed to accelerate the collection of accounts receivable.
6. Write a detailed account on Holding Company Accounts.
25 x 4=100 marks
1. Discuss the main sources of capital to finance capital expenditure.
DEFINITION OF 'CAPITAL EXPENDITURE (CAPEX)'
Capital expenditure, or CapEx, are funds used by a company to acquire or upgrade physical assets such as property, industrial buildings or equipment. It is often used to undertake new projects or investments by the firm. This type of outlay is also made by companies to maintain or increase the scope of their operations. These expenditures can include everything from repairing a roof to building, to purchasing a piece of a equipment, or building a brand new factory.
In terms of accounting, an expense is considered to be a capital expenditure when the asset is a newly purchased capital asset or an investment that improves the useful life of an existing capital asset. If an expense is a capital expenditure, it needs to be capitalized. This requires the company to spread the cost of the expenditure (the fixed cost) over the useful life of the asset. If, however, the expense is one that maintains the asset at its current condition, the cost is deducted fully in the year of the expense.
Capital expenditure should not be confused with revenue expenditure or operating expenses (OPEX). Revenue expenses are shorter-term expenses required to meet the ongoing operational costs of running a business, and therefore