Code No: 35076

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III B.Tech I Semester Supplimentary Examinations,Nov/Dec 2009 MANAGERIAL ECO. AND FINANCIAL ANA. Common to ME, IT, MEP, AME, ICE, E.COMP.E, ETM, CSE, ECE, CSSE Time: 3 hours Max Marks: 80 Answer any FIVE Questions All Questions carry equal marks ????? 1. State the Law of Demand. What are the various factors that determine the demand for a mobile phone? [16]

Bad debts Sales Fuel and power Sales returns Printing Advertising General expenses Closing stock

Rs. 9,000 5,75,000 25,000 10,000 2,250 4,000 6,500 1,01,020

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Rs. Opening stock 2,00,000 Purchases 2,55,000 Wages 1,00,000 Carriage 5,000 Purchase returns 13,250 Salaries 39,000 Rent and taxes 12,000 Depreciation 3,020 Discount allowed 12,500 Repairs 6,000

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2. Prepare Trading and profit and loss A/c of Abhijeeth for the year ending 31st March 2006 from the following information. [16]

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3. A company is considering two investment opportunities (A and B) that cost Rs. 4,00,000 and Rs. 3,00,000 respectively. The first 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 five year period. The company’s cost of capital is 8%. Which project would you choose under NPV method? [16] 4. Privatisation is a necessary evil. Support your arguments giving reasonable justifications. [16] 5. (a) Discuss the benefits and limitations of Break even Analysis.

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(b) With assumed data, illustrate the following: i. ii. iii. iv.

Breakeven output and sales value Margin of safety P/v ratio Output to achieve targeted profit

[8+8]

6. Explain the meaning of the ‘Analysis of Financial Statements’. Discuss briefly the different types of analysis. [16] 7. (a) What are the conditions for securing monopoly power? 1

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(b) Explain how the monopolist gets supernormal profits under conditions of increasing returns or diminishing returns? Use diagrams. [6+10] 8. What are the various methods of demand forecasting. Evaluate various surveybased demand forecasting methods. [16]

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Code No: 35076

Set No - 2

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III B.Tech I Semester Supplimentary Examinations,Nov/Dec 2009 MANAGERIAL ECO. AND FINANCIAL ANA. Common to ME, IT, MEP, AME, ICE, E.COMP.E, ETM, CSE, ECE, CSSE Time: 3 hours Max Marks: 80 Answer any FIVE Questions All Questions carry equal marks ????? 1. (a) From the following information, calculate

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i. Debt Equity ratio ii. Current ratio

[16]

Rs. 30,000 70,000

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Rs. Debentures 1,40,000 Bank balance Long term loans 70,000 Sundry Debtors General reserve 40,000 Creditors 66,000 Bills payable 14,000 Share capital 1,20,000

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(b) Calculate Interest Coverage ratio from the following information.

Net profit after deducting interest and taxes 12% Debentures of the face value of Amount provided towards taxation

Rs. 6,00,000 15,00,000 1,20,000

2. (a) What are the features of monopolistic competitions? (b) Explain the differences between monopolistic competition and perfect competition. [8+8]

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3. Evaluate the partnership form of business organization. How does it overcome the limitations of sole trading? [16] 4. The following information is obtained from the records of a factory: Sales (4000 units @ Rs.25 each) Rs.100000

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Variable Cost Rs. 72000

Fixed Expenses Rs. 16800 Calculate:

(a) P/V Ratio,

(b) Break-Even Point in Rupees, (c) Margin of Safety (d) It is proposed to reduce the selling price by 20%. What extra units should be sold to obtain the same amount of profit? [16] 3

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5. (a) What do you understand by Elasticity of demand. How is it classified. (b) Determine price elasticity of demand given that the quantity demanded of a product is 1000 units when the price is Rs. 100 and when the price declines to Rs.90, demand increases to 1500 units. [8+8]

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6. Explain the following concepts and illustrate their treatment with imaginary data. [16] (a) Depreciation (b) Prepaid expenses

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(c) Reserve for bad and doubtful debts (d) Income received in advance.

7. Managerial Economics is the integration of Economic Theory with Business Practice for the purpose of decision making and forward planning. Discuss. [16]

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8. Explain the concept of capital budgeting and what is its practical utility?

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[16]

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III B.Tech I Semester Supplimentary Examinations,Nov/Dec 2009 MANAGERIAL ECO. AND FINANCIAL ANA. Common to ME, IT, MEP, AME, ICE, E.COMP.E, ETM, CSE, ECE, CSSE Time: 3 hours Max Marks: 80 Answer any FIVE Questions All Questions carry equal marks ????? 1. Define ‘Demand’ and explain the factors that influence the demand of product. [16]

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Debit. (Rs) Credit. (Rs.) 55,000 22,500 95,000 2,500 4,000 2,000 1,500 14,000 5,500 1,50,000 98,250 7,500 6,250 6,500 2,50,000 67,500 29,250 22,250 89,500 4,64,500 4,64,500

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Opening stock Bills Receivable Purchases and Purchase returns Commission paid and received Trade expenses Wages Insurance Sundry debtors and Creditors Interest on capital Carriage inwards Sales returns and sales Cash on hand Cash at bank Bills payable Capital

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2. The following balances are taken from the books of Abdul Rahman as on 31st March, 2005 with the help of which prepare Trading A/c, Profit & Loss A/c and Balance Sheet. [16]

Closing stock was valued at Rs. 90,000.

3. (a) What is the importance of Capital budgeting?

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(b) How do the discounting models differ from non-discounting models?

[6+10]

4. (a) Define ‘Cost’. How are costs classified? (b) Explain any five important cost concepts useful for managerial decisions. [6+10]

5. What are the salient features of a company? Why has it become the most popular form of organization? [16] 6. (a) What is meant by price Elasticity of demand.

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(b) Determine price elasticity of demand given that the quantity demanded of a product is 1000 units when the price is Rs. 100 and when the price declines to Rs.50, demand increases to 1500 units. [8+8] 7. (a) What are the causes for the emergence of Monopoly? (b) Elaborate how price output decisions can be taken by a monopolist.

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8. Compute the following ratios.

[6+10]

(a) Calculate Earnings Per share

(b) Calculate Debtor ? Turnover ratio

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Rs. Net profit before preferential dividend 1,15,000 Equity share capital (40,000 shares of Rs.100 each) 4,00,000 121/2 % preference share capital 2,00,000

Rs.1,75,000

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Total sales for the year Cash sales 25% of total sales Sales returns out of credit sales Sundry Debtors - Opening balance Sundry Debtors - Closing balance

Rs.10,000 Rs. 8,000 Rs.12,000

(c) Calculate interest coverage ratio

Rs. Net profit after deducting Interest and Tax 6,00,000 12% Debentures of the face value of 15,00,000 Provision for taxation 1,20,000

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(d) A company has current ratio of 3:1 and Quick ratio of 1:2. If the Working Capital is Rs. 1,80,000, calculate Current liabilities and Stock. [4+4+4+4]

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III B.Tech I Semester Supplimentary Examinations,Nov/Dec 2009 MANAGERIAL ECO. AND FINANCIAL ANA. Common to ME, IT, MEP, AME, ICE, E.COMP.E, ETM, CSE, ECE, CSSE Time: 3 hours Max Marks: 80 Answer any FIVE Questions All Questions carry equal marks ?????

2. Explain different types of working capital.

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1. (a) What do you understand by ?Product differentiation? (b) In how many different ways product can be differentiated. (c) Are Monopolistic competition and monopoly similar or different? Analyse. [6+6+4]

3. (a) What do you understand by ‘Laws of Returns to scale’. Explain. (b) How do they influence Average cost?

[16]

[12+4]

Closing stock outstanding expenses Prepaid Income Bad debts.

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(a) (b) (c) (d)

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4. Explain the following adjustments and illustrate suitably with assumed data. [16]

5. Explain the role of a Managerial Economist in a Business firm.

[16]

6. (a) As a business manager, what methods would you consider for forecasting the demand for a new product. (b) What are the characteristics a good demand forecasting method. [16]

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7. “In the changing business environment the public sector enterprises should follow the principles of business” Is it true? [16]

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8. (a) Calculate Earnings Per share Rs. Profit Before Tax 2,00,000 Tax Rate 50% 12% Preference Share capital 2,00,000 Equity share capital (Rs. 10 each) 2,00,000

(b) Calculate interest coverage ratio Rs. Profit before Debenture interest and 40,00,000 After making provision for Tax 10% Debenture capital 80,00,000 Tax Provision made for the year 16,00,000 7

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(c) Find out the Gross profit ratio

Net sales Cost of goods sold

Rs. 8,12,500 5,98,000

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(d) How do you Compute Price Earning ratio with the help of Earnings per share. [4+4+4+4]

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