Managerial Economics And Financial Analysis Rr220201

Set No. 1

Code No: RR220201

II B.Tech II Semester Supplimentary Examinations, Apr/May 2007 MANAGERIAL ECONOMICS AND FINANCIAL ANALYSIS ( Common to Electrical & Electronic Engineering, Electronics & Communication Engineering, Computer Science & Engineering, Electronics & Instrumentation Engineering, Bio-Medical Engineering, Information Technology, Electronics & Control Engineering, Mechatronics and Computer Science & Systems Engineering) 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? [8+8] 2. Explain and illustrate the following: and also mention why do they arise (a) The Law of constant Returns. (b) The Law of increasing Returns.

[8+8]

3. You are given the following information about two companies in 2000. Particulars Company A Company B Sales Rs.50,00,000 Rs.50,00,000 Fixed Expenses Rs.12,00,000 Rs.17,00,000 Variable Expenses Rs.35,00,000 Rs.30,00,000 A friend seeks your advice as to which company’s shares he should purchase. Assuming the Capital invested is equal for the two companies, state the advice that you will give. [16] 4. Explain how an individual firm attains equilibrium in the short run and in the long run under conditions of Perfect Competition. [16] 5. Explain the need for public enterprise in India? Do you think public enterprises as a whole have fulfilled that need? [16] 6. Define ‘Accounting rate of return’ ‘and Pay back period method’ ? Compare and contrast the two.Illustrate with assumed data. [16] 7. Jounalise the following transactions and post them to ledger. 1. Ram invests Rs. 10,000 in cash. 2. He bought goods worth Rs. 2,000 from Shyam. 3 He bought a machine for Rs. 5,000 from Lakshman on account 4. He paid to Lakshman Rs. 2,000 5. He sold goods for cash Rs. 3,000 6. He sold goods to A on account Rs. 4,000 7. He paid to Shyam Rs. 1,000 8. He received amount from A Rs. 2,000 1 of 2

[16]

Set No. 1

Code No: RR220201

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) Acid ratio (c) Stock turnover ratio. Also interpret the results. ⋆⋆⋆⋆⋆

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[5+5+6]

Set No. 2

Code No: RR220201

II B.Tech II Semester Supplimentary Examinations, Apr/May 2007 MANAGERIAL ECONOMICS AND FINANCIAL ANALYSIS ( Common to Electrical & Electronic Engineering, Electronics & Communication Engineering, Computer Science & Engineering, Electronics & Instrumentation Engineering, Bio-Medical Engineering, Information Technology, Electronics & Control Engineering, Mechatronics and Computer Science & Systems Engineering) Time: 3 hours Max Marks: 80 Answer any FIVE Questions All Questions carry equal marks ⋆⋆⋆⋆⋆ 1. (a) Define income - elasticity of demand. How does income - elasticity differ from price elasticity of demand? (b) How is cross elasticity of demand computed?

[4+4+6]

2. (a) What is meant by internal and external economies of scale? (b) What are the sources of internal and external economies? (c) Discuss various types of internal economies available to a firm.

[5+6+5]

3. What cost concepts are mainly used for managerial decisions? Illustrate. [6+10] 4. What is a Market? Explain, in brief, the different Market structures.

[4+12]

5. Discuss the factors that help in choosing a suitable form of Business Organization in private,and public sector. [16] 6. Give various examples of capital budgeting decisions. Classify them into specific kinds [16] 7. Jounalise the following transactions and post them to ledger. 1. Ram invests Rs. 10,000 in cash. 2. He bought goods worth Rs. 2,000 from Shyam. 3 He bought a machine for Rs. 5,000 from Lakshman on account 4. He paid to Lakshman Rs. 2,000 5. He sold goods for cash Rs. 3,000 6. He sold goods to A on account Rs. 4,000 7. He paid to Shyam Rs. 1,000 8. He received amount from A Rs. 2,000

[16]

8. From the following extract of a balance sheet of an Airlines company calculate the debt equity ratio and interest coverage ratio. Given that the debt equity ratio is in the range of 10:1 , how do you interpret this ratio? 50,000, 10% preference shares of 2,00,000 equity shares of 10% ,30,000 debentures of Net profit during the year was

Rs.100 each Rs.10 each Rs.100 each Rs. 10,00,000 1 of 2

[16]

Set No. 2

Code No: RR220201 ⋆⋆⋆⋆⋆

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Set No. 3

Code No: RR220201

II B.Tech II Semester Supplimentary Examinations, Apr/May 2007 MANAGERIAL ECONOMICS AND FINANCIAL ANALYSIS ( Common to Electrical & Electronic Engineering, Electronics & Communication Engineering, Computer Science & Engineering, Electronics & Instrumentation Engineering, Bio-Medical Engineering, Information Technology, Electronics & Control Engineering, Mechatronics and Computer Science & Systems Engineering) Time: 3 hours Max Marks: 80 Answer any FIVE Questions All Questions carry equal marks ⋆⋆⋆⋆⋆ 1. What are the contributions and limitations of managerial economics to business managers? [16] 2. Explain and illustrate the following: and also mention why do they arise (a) The Law of constant Returns. (b) The Law of increasing Returns.

[8+8]

3. (a) The information about Raj and Co., are given below: i. Profit-Volume Ratio 20 % ii. Fixed Cost Rs.36,000 iii. Selling price per unit Rs.150 (b) Calculate: i. ii. iii. iv.

BEP (in Rs.) BEP (in units) Variable Cost per unit Selling price per unit.

[4×4]

4. Define Markets? Elaborate how differently are markets classified?

[4+12]

5. Discuss the factors that help in choosing a suitable form of Business Organization in private,and public sector. [16] 6. What are major sources of short term finance? Evaluate.

[16]

7. (a) How do you know that given Trial balance is correct or not ? (b) From the following Leger Account balances prepare a Trial Balance as on 31-12-2002

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Set No. 3

Code No: RR220201

i ii. iii iv v. vi vii viii ix. x. xi xii. xiii. xiv. xv

Rs. Rs. Opening Stock 15,600 xvi. Insurance 400 Freehold premises 30,000 xvii Bad reserve 300 Plant and Machinery 9,000 xviii. Commission Received 3,000 Wages 2,000 xix. paid 1,000 Sundry debtors 12,000 xx Bad debts 300 Carriages inwards 180 xxi Office expenses 1,500 Carriage outwards 200 xxi Salaries 2,000 Factory expenses 1,600 xxiii. Traveling expenses 200 Royalty 200 xxiv. Legal expenses 200 Purchase of machinery 15,000 xxv Cash at bank 840 Office rent 1,400 xxvi. Cash in hand 800 Capital 16,000 xxvii Loan taken 6,000 Discount Allowed 800 xxviii Office rent 800 Discount received 720 xxix Net sales 66,000 Sundry creditors 4,000 [16]

8. From the following extract of a balance sheet of an Airlines company calculate the debt equity ratio and interest coverage ratio. Given that the debt equity ratio is in the range of 10:1 , how do you interpret this ratio? 50,000, 10% preference shares of 2,00,000 equity shares of 10% ,30,000 debentures of Net profit during the year was

Rs.100 each Rs.10 each Rs.100 each Rs. 10,00,000 ⋆⋆⋆⋆⋆

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[16]

Set No. 4

Code No: RR220201

II B.Tech II Semester Supplimentary Examinations, Apr/May 2007 MANAGERIAL ECONOMICS AND FINANCIAL ANALYSIS ( Common to Electrical & Electronic Engineering, Electronics & Communication Engineering, Computer Science & Engineering, Electronics & Instrumentation Engineering, Bio-Medical Engineering, Information Technology, Electronics & Control Engineering, Mechatronics and Computer Science & Systems Engineering) Time: 3 hours Max Marks: 80 Answer any FIVE Questions All Questions carry equal marks ⋆⋆⋆⋆⋆ 1. Discuss the utility of demand forecasting. What is the criteria of a good forecasting method? For [4+6+6] (a) new products (b) Ezisting products. 2. Explain and illustrate the following: and also mention why do they arise (a) The Law of constant Returns. (b) The Law of increasing Returns.

[8+8]

3. You are given the following information about two companies in 2000. Particulars Company A Company B Sales Rs.50,00,000 Rs.50,00,000 Fixed Expenses Rs.12,00,000 Rs.17,00,000 Variable Expenses Rs.35,00,000 Rs.30,00,000 A friend seeks your advice as to which company’s shares he should purchase. Assuming the Capital invested is equal for the two companies, state the advice that you will give. [16] 4. Define Markets? Elaborate how differently are markets classified? 5. Discuss the features of company type of Business Organisation.

[4+12] [16]

6. Define ‘Accounting rate of return’ ‘and Pay back period method’ ? Compare and contrast the two.Illustrate with assumed data. [16] 7. Explain the basic accounting concepts and convention. Give examples. 8. (a) What are different tests of profitability for an investment?

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[16]

Set No. 4

Code No: RR220201

(b) The following is an extract of balance sheet of a company during the last year. Compute current ratio and quick ratio. Also interpret the ratios. Rs. Land and Buildings 1,50,000 Plant and machinery 3,00,000 Furniture and fixtures 1,25,000 Closing stock 25,000 Sundry debtors 62,500 Wages prepaid 7,500 Sundry creditors 18,000 Rent outstanding 12,000. [16] ⋆⋆⋆⋆⋆

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