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# 0102 Managerial Economics And Financial Analysis

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0102 Managerial Economics And Financial Analysis

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### Transcript of "0102 Managerial Economics And Financial Analysis"

1. 1. www.studentyogi.com www.studentyogi.com Code No: R05210102 Set No. 1 II B.Tech I Semester Supplimentary Examinations, November 2008 MANAGERIAL ECONOMICS AND FINANCIAL ANALYSIS ( Common to Civil Engineering and Metallurgy & Material Technology) Time: 3 hours Max Marks: 80 Answer any FIVE Questions All Questions carry equal marks 1. What is meant by Demand? Every one desires to own a Maruti car. Does this mean that the demand for Maruti car is large? If it is otherwise, how do you narrate? [16] 2. What is meant by Elasticity of demand. How do you measure it? [16] 3. Write short notes on the following: (a) Isoquants (b) Least cost combination of inputs (c) Budget line (d) Marginal rate of Technical substitution. [4+4+4+4] 4. (a) What are the principal di erences between monopoly and perfect competition? (b) Supplement your answer with appropriate diagrams in both the cases. [8+8] 5. Distinguish between partnership and Joint sto ck company organization. [16] 6. A company is considering two investment opportunities (A and B) that cost Rs. 4,00,000 and Rs. 3,00,000 respectively. The rst project generates Rs. 1,00,000/- a year for four years. The second generates Rs.60,000/-, Rs. 1,00,000/, Rs. 80,000/- Rs, 90,000/- and Rs. 70,000 over a ve year period. The company’s cost of capital is 8%. Which pro ject would you choose under NPV method? [16] 7. (a) How can you make use of data available in the trial balance for nalizingac- counts? (b) Explain the procedure to be followed while preparing Trading Account, Pro t and Loss Account and Balance Sheet with the help of a trial balance. [8+8] 8. Discuss the importance of Ratio Analysis for inter rm and intra- rm comparison, including circumstances responsible for its limitations, if any. [16] 1 of 1 www.studentyogi.com www.studentyogi.com
2. 2. www.studentyogi.com www.studentyogi.com Code No: R05210102 Set No. 2 II B.Tech I Semester Supplimentary Examinations, November 2008 MANAGERIAL ECONOMICS AND FINANCIAL ANALYSIS ( Common to Civil Engineering and Metallurgy & Material Technology) Time: 3 hours Max Marks: 80 Answer any FIVE Questions All Questions carry equal marks 1. Managerial Economics is the application of Economic Theory to business manage- ment. Discuss. [16] 2. What are the needs for demand forecasting. Explain the various steps involved in demand forecasting. [16] 3. (a) What are Isoquants? Explain the chief characteristics of Isoquants? (b) What do you understand by Least Cost Combination of inputs and how can it be achieved. [8+8] 4. (a) What are the causes for the emergence of Monopoly? (b) Elaborate how price output decisions can be taken by a monopolist. [6+10] 5. Write short note on the following. [4×4] (a) Limited Liability (b) Public and Private Companies (c) Memorandum of Asso ciation (d) Govt. Company. 6. Following is the information in respect of the three pro jects A,B and C. [16] Item A B C Initial Investment ( in Rs) 60,000/- 2150/- 4,25,000/- Annual Cash Flow (in Rs) 12,000/- 1500/- 2,51,000/- Life Period (in years) 15 3 20 If the cost of capital for all the three projects is 10%, rank them using NPV method and simple pay back method. 7. The trail balance of Anil is given below, prepare the Trading Account, Pro t & Loss Account for the year ending 31st December 2005 and Balance sheet as on that 1 of 2 www.studentyogi.com www.studentyogi.com
3. 3. www.studentyogi.com www.studentyogi.com Code No: R05210102 Set No. 2 date. [16] Debit Rs. Credit Rs. Drawings and capital 72,000 6,00,000 Opening stock 2,05,000 Purchases and sales 6,80,000 14,05,000 Carriage inwards 15,000 Debtors and creditors 2,35,000 1,43,000 Cash 39,000 Salaries 2,53,000 Bills payable 42,000 Insurance 1,12,000 Machinery 3,00,000 Wages 2,15,000 Commission received 10,000 Trade expenses 69,000 Freight inwards 5,000 22,00,000 22,00,000 Adjustments (a) Closing stock was valued at Rs.3,50,000 (b) Provide a reserve for bad and doubtful debts @ 2% on debtors. 8. (a) What are the parties that make use of nancial statements for their decision making? (b) How do they apply the same? Elaborate. [8+8] 2 of 2 www.studentyogi.com www.studentyogi.com
4. 4. www.studentyogi.com www.studentyogi.com Code No: R05210102 Set No. 3 II B.Tech I Semester Supplimentary Examinations, November 2008 MANAGERIAL ECONOMICS AND FINANCIAL ANALYSIS ( Common to Civil Engineering and Metallurgy & Material Technology) Time: 3 hours Max Marks: 80 Answer any FIVE Questions All Questions carry equal marks 1. Managerial Economics is the study of allocation of resources available to a rm or other unit of management among the activities of that unit. Explain. [16] 2. What are the needs for demand forecasting. Explain the various steps involved in demand forecasting. [16] 3. (a) De ne ‘Cost’. How are costs classi ed? (b) Explain any ve important cost concepts useful for managerial decisions. [6+10] 4. (a) What are the principal di erences between monopoly and perfect competition? (b) Supplement your answer with appropriate diagrams in both the cases. [8+8] 5. Discuss about the short-comings of the public sector enterprises in India and what is their future? [16] 6. (a) What is the importance of capital? (b) What factors determine the working capital requirements of a company? [6+10] 7. (a) What is the procedure to be followed while preparing a trial balance and how can you validate the trial balance prepared. (b) What are the ob jectives of preparing the trial balance. [10+6] 8. (a) From the following information, calculate [16] i. Debt Equity ratio ii. Current ratio Rs. Rs. Debentures 1,40,000 Bank balance 30,000 Long term loans 70,000 Sundry Debtors 70,000 General reserve 40,000 Creditors 66,000 Bills payable 14,000 Share capital 1,20,000 (b) Calculate Interest Coverage ratio from the following information. 1 of 2 www.studentyogi.com www.studentyogi.com
5. 5. www.studentyogi.com www.studentyogi.com Code No: R05210102 Set No. 3 Rs. Net pro t after deducting interest and taxes 6,00,000 12% Debentures of the face value of 15,00,000 Amount provided towards taxation 1,20,000 2 of 2 www.studentyogi.com www.studentyogi.com
6. 6. www.studentyogi.com www.studentyogi.com Code No: R05210102 Set No. 4 II B.Tech I Semester Supplimentary Examinations, November 2008 MANAGERIAL ECONOMICS AND FINANCIAL ANALYSIS ( Common to Civil Engineering and Metallurgy & Material Technology) Time: 3 hours Max Marks: 80 Answer any FIVE Questions All Questions carry equal marks 1. What is meant by Demand? Every one desires to own a Maruti car. Does this mean that the demand for Maruti car is large? If it is otherwise, how do you narrate? [16] 2. What are the needs for demand forecasting. Explain the various steps involved in demand forecasting. [16] 3. (a) Draw a diagram of pro t graph. (b) You are required to calculate i. Margin of Safety ii. Sales iii. Variable Cost from the Following gures: Fixed Costs Rs.12000, Pro t, Rs.1000, Break-Even Sales=Rs.60000 [4+12] 4. ‘A competitor under conditions of perfect competition is only price taker and quan- tity adjustor’ - In the light of the above statement, discuss clearly the important features of perfect competition and how price output decisions can be taken. [16] 5. Explain the features of sole trader form of organization. Discuss the merits and demerits of sole trader form of organization. [16] 6. Explain the right procedure for a capital budgeting decision. [16] 7. The following trial balance belongs to Amzad Khan with the help of which prepare 1 of 2 www.studentyogi.com www.studentyogi.com
7. 7. www.studentyogi.com www.studentyogi.com Code No: R05210102 Set No. 4 trading and pro t and loss A/c and balance sheet. [16] Dr. Cr. Drawing and capital 18,000 1,00,000 Furniture 32,500 Equipment 15,000 Loan payable 15,000 Interest on loan 900 Sales 1,00,000 Purchases 75,000 Opening stock(1.1.05) 25,000 Trade expenses 15,000 Wages 2,000 Insurance 1,000 Commission received 4,500 Sundry debtors 28,100 Cash at bank 20,000 Sundry creditors 10,000 Interest received 3,000 2,32,500 2,32,500 Adjustments: (a) Closing stock as on 31st December 2005, was valued at Rs.60,000 (b) Wages were outstanding by Rs.500 (c) Provide depreciation @ 10% on furniture. 8. Discuss the importance of Ratio Analysis for inter rm and intra- rm comparison, including circumstances responsible for its limitations, if any. [16] 2 of 2 www.studentyogi.com www.studentyogi.com