CS-54 :
FINANCE & ACCOUNTING ON COMPUTERS JUN 99
| Time : 3 Hours |
Max. Marks : 75 |
Note : There are 6 questions in the paper.
Question no. 1 is compulsory and carries 35 marks. From the remaining
attempt any two questions. Each of these carries 20 marks.
| 1. | (a). | In about one short paragraph, explain the meaning of the following words or phrases : |
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(i).
Owner's equity |
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| (b). | What is the present value of each flow of Rs. 5,000 to be received at the end of 3 years, discounted at 12% annual rate of interest ? | |
| (c). | What is the rate of return on equity for a company whose profit margin is 6%, total assets/turnover ratio is 2 times and its equity/total assets ratio is 40% | |
| 2. | (a). | Distinguish between gross profit, operating profit and net profit. |
| (b). |
A firm has a sales revenue for a given year of Rs. 1,00,000. The depreciation for that year is Rs. 20,000. Other operating expenses and Rs. 90,000. What is the net loss for the period ? What is the amount of funds generated from operations during the period ? Under what circumstances can the funds from operations be zero ? |
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| 3. | How would you judge the efficiency of the management of working capital in a business enterprise ? Explain with the help of hypothetical data. How can computers help ? | |
| 4. | What are the salient features of an appropriate capital structure ? What are the main factors to be considered when a capital structure decision is taken ? | |
| 5. |
What aspects must be connected for the financial appraisal of an investment proposal ? What computer tools would you use to choose the parameters so that the pay-back period, internal rate of return and profitability index are within acceptable limits ? Give the broad strategy for the development of an appropriate software for this purpose. |
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| 6. |
A health advisory service offers to its subscribes complex information on doctors, paramedicals, health insurance super specially hospitals and general health awareness. It now plans to computerise these services and has a choice of two systems on which to offer these services. Under lakhs per year and the subscriber requests would be processed with a variable cost of Rs. 20 per request. under plan B, another system could be leased for Rs. 10 lakhs per year, but processing costs are Rs. 120 per request. |
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(i) Which
option is more risky ? |