Set No: 1
Code No:
RR-220201
II B. Tech II-Semester Supplementary Examinations, Nov/Dec-2004
MANAGERIAL ECONOMICS AND FINANCIAL ANALYSIS
(Common to Electrical and Electronics Engineering, Electronics and
Instrumentation Engineering, Electronics and Control Engineering, Electronics
and Communication Engineering, Computer Science and Engineering, Mechatronics,
Bio Medical Engineering, Computer Science and Systems Engineering and
Information Technology)
Time: 3 hours Max. Marks: 80
Answer Any FIVE questions
All questions carry equal marks
---
1. What is promotional elasticity of demand? How does it differ from cross elasticity of demand?
2. Explain and illustrate the following:
a) The Law of Constant Returns.
b) The Law of increasing Returns.
3.a) Explain the utility of Break-Even Analysis in managerial decision-making.
b) How do you explain breakeven chart? Explain.
4.a) Distinguish between perfect and imperfect markets.
b) What are the different market situations in imperfect competition?
5. What are the factors governing choice of form of business organization?
6. The proposals in respect of the following two projects are to be examined using (a) pay back method (b) Accounting rate of return method
Initial investment for both projects = Rs. 20000
Estimated cash flows: after Tax are as follows:
|
Year |
Proposal 1 Rs. |
Proposal 2 Rs. |
|
1 |
12,500 |
11,750 |
|
2 |
12,500 |
12,250 |
|
3 |
12,500 |
12,500 |
|
4 |
12,500 |
13,500 |
Code No: RR-220201 -2- Set No: 1
7. From the following Trail Balance and adjustments of Suresh, prepare Trading and Profit and Loss Account for the year ending 30th June , 2002 and a Balance sheet as on that date.
|
|
Debit Rs. |
Credit Rs. |
|
Suresh’s Drawings |
14,000 |
|
|
Furniture |
5,200 |
|
|
Land and buildings |
40,000 |
|
|
Opening stock |
44,000 |
|
|
Debtors |
37,200 |
|
|
Purchases |
2,20,000 |
|
|
Sales returns |
4,000 |
|
|
Discounts |
3,200 |
|
|
Taxes and insurance |
4,000 |
|
|
General expenses |
8,000 |
|
|
Salaries |
18,000 |
|
|
Commission |
4,400 |
|
|
Carriage |
3,600 |
|
|
Bad debts |
1,600 |
|
|
Suresh capital accounts |
|
60,000 |
|
Bank overdraft |
|
8,400 |
|
Creditors |
|
31,600 |
|
Rent from tenants |
|
2,000 |
|
Sales |
|
3,00,000 |
|
Discounts |
|
4,000 |
|
Provision for doubtful debts |
|
1,200 |
|
Total: |
4,07,200 |
4,07,200 |
Adjust the following: a) closing stock Rs.70,000 b) write off depreciation Rs.10% per annum on land and buildings c) taxes yet to be paid Rs.200.
8.> Two companies ABC Limited and XYZ Limited have approached ICICI Bank for a loan sanction of Rs.50,000 for working capital purpose.
ABC LIMITED(Rs.) XYZ LIMITED(Rs.)
Net sales 9,10,000 7,50,000
Gross profit 3,82,200 2,92,500
Interest paid 20,000 8,200
Income Tax 75,000 50,000
Profit after Tax 82,000 56,250
Inventories 90,000 65,200
Debtors 70,000 56,000
Cash 6,000 18,000
Current liabilities 1,82,000 1,16,000
Long term liability 1,60,000 1,30,000
Shareholders equity 1,80,000 1,40,000
Note that bank wants to sanction loan only to one applicant whom do you recommend and why.
^*^*^
Set No: 2
Code No:
RR-220201
II B. Tech II-Semester Supplementary Examinations, Nov/Dec-2004
MANAGERIAL ECONOMICS AND FINANCIAL ANALYSIS
(Common to Electrical and Electronics Engineering, Electronics and
Instrumentation Engineering, Electronics and Control Engineering, Electronics
and Communication Engineering, Computer Science and Engineering, Mechatronics,
Bio Medical Engineering, Computer Science and Systems Engineering and
Information Technology)
Time: 3 hours Max. Marks: 80
Answer Any FIVE questions
All questions carry equal marks
---
1. Describe the various methods of measurement of price elasticity of demand
2. Why does the Law of Diminishing Returns operate? Explain with the help of a diagram.
3. Write short notes on:
a) Fixed cost and Variable cost.
b) Out of pocket costs and Imputed costs.
4. Illustrate the price determination under monopoly.
5. Explain the merits of partnership.
6. A company has at hand two proposals for consideration (M and N). The cost of the proposals in both the cases is Rs. 5,00,000 each. A discount factor of 12 % may be used to evaluate the proposals. Cash inflows after taxes are as under.
|
Year |
Proposal M Rs. |
Proposal N Rs. |
|
1 |
1,50,000 |
50,000 |
|
2 |
2,00,000 |
1,50,000 |
|
3 |
2,50,000 |
2,00,000 |
|
4 |
1,50,000 |
3,00,000 |
|
5 |
1,00,000 |
2,00,000 |
Which one will you recommend under Present Value method?
Code No: RR-220201 -2- Set No: 2
7. In the books of Kishore, prepare Trading and profit and loss account for the year ended 30th June, 2003:
|
|
Rs. |
|
Stock (1.7.2002) |
1,06,000 |
|
Purchases |
3,00,000 |
|
Wages |
2,50,000 |
|
Office salaries |
60,000 |
|
Discount on sales |
20,000 |
|
Carriage inwards |
20,000 |
|
Carriage outwards |
60,000 |
|
Stationery |
3,000 |
|
Rent (¾ to Factory) |
48,000 |
|
Postage |
3,500 |
|
Transport and conveyance |
25,000 |
|
General charges |
3,500 |
|
Commission |
26,000 |
|
Power |
55,000 |
|
Rebate on purchases |
10,000 |
|
Sales |
10,00,000 |
8. The summarized balance sheet of Alpha Ltd., as on 31st March 2000, 2001 and 2002 are given below:
--------------------------- -------------------------------------------------------------------
As
on March 31st
2000 2001 2002
(Rs.in lakhs)
Liabilities:
Paid up capital 194 194 194
Borrowing long term
i.bonds 68 97 124
ii.others 281 343 379
Current liabilities 52 54 99
----- -------- --------
595 688 796
----- -------- -------
Assets:
Gross Block 355 356 361
Less depreciation 69 95 122
----- ------ -----
Net Block 286 261 239
Current Assets 143 199 234
Profit and Loss account 166 228 323
----- ----- -----
Total 595 688 796
From the above compute the following as on 31st Mar 2000 and 2002:
a) Debt to Equity Ratio b) Current Ratio c) Net worth Ratio and comment on the results.
^*^*^
Set No: 3
Code No:
RR-220201
II B. Tech II-Semester Supplementary Examinations, Nov/Dec-2004
MANAGERIAL ECONOMICS AND FINANCIAL ANALYSIS
(Common to Electrical and Electronics Engineering, Electronics and
Instrumentation Engineering, Electronics and Control Engineering, Electronics
and Communication Engineering, Computer Science and Engineering, Mechatronics,
Bio Medical Engineering, Computer Science and Systems Engineering and
Information Technology)
Time: 3 hours Max. Marks: 80
Answer Any FIVE questions
All questions carry equal marks
---
1.a) What are the possible approaches to forecasting demand for new products?
b) Discuss the utility of demand forecasting.
2. Define production function. Explain how is it helpful for a producer.
3. Write short notes on the following:
a) Explicit cost b) Short run cost
c) Imputed costs d) Variable cost
4. Explain the role of time factor in the determinations of price. Also explain price output determination in case of perfect competition.
5. Explain the merits and demerits of sole trader type of business organization.
6. Given that a project yields the following cash inflows for six years at an original cost of Rs.50,000, determine IRR.
|
Year |
Cash inflows after taxes Rs. |
|
1 |
10,000 |
|
2 |
16,000 |
|
3 |
24,000 |
|
4 |
30,000 |
|
5 |
30,000 |
|
6 |
30,000 |
Code No: RR-220201 -2- Set No: 3
7. Prepare Trading and profit and loss account for the year ended 31.12.2001 and a Balance Sheet as on that date from the following Trail Balance.
|
|
Dr. Rs. |
Cr. Rs. |
|
Furniture |
6,500 |
|
|
Plant and Machinery |
60,000 |
|
|
Buildings |
75,000 |
|
|
Capital |
|
1,25,000 |
|
Bad debts |
1,750 |
|
|
Reserve for bad debts |
|
3,000 |
|
Sundry debtors |
40,000 |
|
|
Sundry creditors |
|
24,000 |
|
Stock (1.1.2001) |
34,600 |
|
|
Purchases |
54,750 |
|
|
Sales |
|
1,54,500 |
|
Bank overdraft |
|
28,500 |
|
Sales returns |
2,000 |
|
|
Purchase returns |
|
1,250 |
|
Advertising |
4,500 |
|
|
Interest |
1,180 |
|
|
Commission received |
|
3,750 |
|
Cash in hand |
6,500 |
|
|
Salaries |
33,000 |
|
|
General expenses |
7,820 |
|
|
Car expenses |
9,000 |
|
|
Taxes and insurance |
3,500 |
|
|
|
3,40,000 |
3,40,000 |
8. The following are the extracts from the financial statements of Blue and Red Ltd., as on 31st March 2001 and 2002 respectively
31 March 2001 31 March 2002
Rs. Rs.
Stock 10,000 25,000
Debtors 20,000 20,000
Bills receivables 10,000 5,000
Cash in hand 18,000 15,000
Bills payable 15,000 20,000
Bank overdraft --- 2,000
9% debentures 5,00,000 5,00,000
Sales for the year 3,50,000 3,00,000
Gross profit 70,000 50,000
Compute for both the years the following:
a) Current ratio b) Liquidity ratio c) Stock turnover ratio. Also interpret the results
^*^*^
Set No: 4
Code No:
RR-220201
II B. Tech II-Semester Supplementary Examinations, Nov/Dec-2004
MANAGERIAL ECONOMICS AND FINANCIAL ANALYSIS
(Common to Electrical and Electronics Engineering, Electronics and
Instrumentation Engineering, Electronics and Control Engineering, Electronics
and Communication Engineering, Computer Science and Engineering, Mechatronics,
Bio Medical Engineering, Computer Science and Systems Engineering and
Information Technology)
Time: 3 hours Max. Marks: 80
Answer Any FIVE questions
All questions carry equal marks
---
1. What is meant by Elasticity of demand? What are the determinants of Elasticity and Inelasticity of demand for a product?
2. Explain the following with reference to production function.
a) Marginal rate of Technical substation.
b) Variable proportions of factors.
3. Write short notes on the following:
a) Profit-Volume Ratio (P/V ratio).
b) Margin of Safety.
c) Angle of incidence.
4. How an individual firm behaves under perfect competition? Also explain the firm and industry equilibrium under perfect competition.
5. Write a short notes on:
a) Public Company b) Government company c) Private Company.
6. A firm has many projects. It wants to earn at least 6 percent per annum on this project with the following cash flows. Do you recommend as per net present value method.
|
Year end |
0 |
1 |
2 |
3 |
4 |
5 |
6 |
|
Cash inflow (Rs.) |
|
10,000 |
30,000 |
40,000 |
40,000 |
40,000 |
50,000 |
|
Cash outflow(Rs.) |
1,00,000 |
|
|
|
|
|
|
Code No: RR-220201 -2- Set No: 4
7. The following figures have been extracted from the records of Fancy Stores a proprietary concern as on 31-12-2003:
|
Furniture |
15,000 |
Insurance |
6,000 |
|
Proprietors capital a/c |
54,000 |
Rent |
22,000 |
|
Cash in hand |
3,000 |
Sundry debtors |
60,000 |
|
Opening stock |
50,000 |
Sales |
6,00,000 |
|
Fixed deposit |
1,34,600 |
Advertisement |
10,000 |
|
Drawings |
5,000 |
Postages and Telephone |
3,400 |
|
Provision for bad debts |
3,000 |
Bad debts |
2,000 |
|
Cash at bank |
10,000 |
Printing and stationery |
9,000 |
|
Purchases |
3,00,000 |
General charges |
13,000 |
|
Salaries |
19,000 |
Sundry creditors |
40,000 |
|
Carriage inwards |
41,000 |
Deposit from Customers |
6,000 |
Prepare Trading, Profit and loss account and balance sheet after taking into consideration the following information.
a) Closing stock as on 31st March was Rs.10,000.
b) Salary of Rs. 2,000 is yet to paid to an employee.
8. Selected financial information about Siri Traders Limited is given below:
2001 2002
------ -------
Sales 6,00,000 4,30,000
Cost of goods sold 5,70,000 3,25,000
Debtors 72,000 30,000
Inventories 1,14,000 55,000
Cash 15,000 8,000
Other current assets 40,000 27,000
Current liabilities 1,60,000 1,10,000
Compute the current ratio, quick ratio, debt collection period and inventory turnover ratios for the above two years and comment on the results.
^*^*^