CS-54 : FINANCE & ACCOUNTING
ON COMPUTERS DEC 98
| Time : 3 Hours |
Max. Marks : 75 |
Note : Question 1 is compulsory. Attempt any three
from the rest.
| 1. | (a). | In about one short paragraph, explain the meaning of the following words or phrases : |
| (i). Accounts receivable | ||
| (ii). Payback period | ||
| (iii). Marginal costing | ||
| (iv). Internal rate of return | ||
| (v). Owner's equity | ||
| (b). | Answer the following questions as Yes if the statement given is true or No. If it is not. You need not write anything more | |
| (i). The ideal value for the Current Ratio is 2 : 1 | ||
| (ii). The ideal value for the Quick Ratio is 2 : 1 | ||
| (iii). Preference Shares always form part of debt | ||
| (iv). Debt-equity ratio overstates the use of leverage | ||
| (v). Fixed-return securities include equity share | ||
| (c). | What is the present value of cash flow of Rs. 15,000 to be received at the end of 3 years discounted at 10% annual rate of interest? | |
| 2. | (a). | Distinguish between gross profit, operating profit and net profit. |
| (b). | What is the rate of return on equity for a company whose profit margin is 18%, total assets turnover ratio is 2 and its equity/total assets ratio is 30%? | |
| 3. |
What is variance in the context of financial management ? Why are variances calculated and now can they be controlled ? What tools would be appropriate for computerising these activities for use in management decision-making? |
|
| 4. |
What aspects must be critically evaluated while financially appraising an investment proposal? What steps would be required to develop a packaged software for this purpose? |
|
| 5. |
What are the emerging changes in the principles and standards used for accounting purposes ? What are the limitation of current computer based accounting systems, which prevent their greater spread ? What further developments and facultations are required? |
|
| 6. |
A travel advisory service
has decided to computerize its operations and has a choice of two systems
on which to offer these services. |
|
| (i). Which option is more risky ? | ||
| (ii). Which plan has more operating leverage ? | ||
| (iii). Construct break-even charts for the two options | ||
| (iv) At what volume of business would the operating profit under either option be the same ? |