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II B.Tech I Semester Supplimentary Examinations, November 2007
MANAGERIAL ECONOMICS AND FINANCIAL ANALYSIS
( Common to Electronics & Telematics, Electronics & Computer
Engineering and Instrumentation & Control Engineering)
Time: 3 hours Max Marks: 80
Answer any FIVE Questions
All Questions carry equal marks
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1. What is promotional elasticity of demand? How does it differ from cross elasticity
of demand? [8+8]
2. Write short notes on the following:
(a) Firm and Industry
(b) Cobb-Dongles production function
(c) Concept of period in production. [4+8+4]
3. You are given the following information about two companies in 2000.
A friend seeks your advice as to which company’s shares he should purchase. As-
suming 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? [4+12]
5. Write a short notes on
(a) Departmental undertaking
(b) Government company
(c) Public corporation. [5+6+5]
6. Given that a project yields the following cash inflows for six years at an original
cost of Rs.50,000, [16]
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Code No: RR211701 Set No. 1
7. Jounalise the following transactions and post them to ledger. [16]
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
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?
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Code No: RR211701 Set No. 2
II B.Tech I Semester Supplimentary Examinations, November 2007
MANAGERIAL ECONOMICS AND FINANCIAL ANALYSIS
( Common to Electronics & Telematics, Electronics & Computer
Engineering and Instrumentation & Control 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]
2. Explain and illustrate the following: and also mention why do they arise
3. (a) What is meant by Break-Even Analysis? Explain the uses and limitations of
BEP.
(b) Appraise the usefulness of Break-Even Analysis for a multi product organiza-
tion. [10+6]
6. Find out the average rate of return from the following data relating to Machines 1
and 2
The estimated cash inflows after taxes for each machine are as given below: [16]
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Code No: RR211701 Set No. 2
Year Machine 1 Machine 2
Rs. Rs.
1 1,50,000 2,00,000
2 3,00,000 3,00,000
3 1,50,000 2,50,000
4 —— 1,50,000
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Code No: RR211701 Set No. 3
II B.Tech I Semester Supplimentary Examinations, November 2007
MANAGERIAL ECONOMICS AND FINANCIAL ANALYSIS
( Common to Electronics & Telematics, Electronics & Computer
Engineering and Instrumentation & Control 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]
2. Explain and illustrate the following: and also mention why do they arise
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. BEP (in Rs.)
ii. BEP (in units)
iii. Variable Cost per unit
iv. Selling price per unit. [4×4]
6. Given the following information in respect of the two project proposals rank them
by applying the criteria of
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Code No: RR211701 Set No. 3
Initial investment: Rs.25,000 [8+8]
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Code No: RR211701 Set No. 4
II B.Tech I Semester Supplimentary Examinations, November 2007
MANAGERIAL ECONOMICS AND FINANCIAL ANALYSIS
( Common to Electronics & Telematics, Electronics & Computer
Engineering and Instrumentation & Control Engineering)
Time: 3 hours Max Marks: 80
Answer any FIVE Questions
All Questions carry equal marks
⋆⋆⋆⋆⋆
2. Explain and illustrate the following: and also mention why do they arise
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. BEP (in Rs.)
ii. BEP (in units)
iii. Variable Cost per unit
iv. Selling price per unit. [4×4]
5. What are the reasons for Joint Stock Companies being popular as a form of business
Organization? Explain. Why some companies with good beginning disappear
slowly? [16]
6. Define ‘Accounting rate of return’ ‘and Pay back period method’ ? Compare and
contrast the two.Illustrate with assumed data. [16]
7. From the following Trial Balance of Sri Krishna and Company prepare trading and
profit and loss account for the year ended December 31, 2000 and a Balance Sheet
as on that date.
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Code No: RR211701 Set No. 4
Rs. Rs.
Debit Credit
Machinery 3,67,600
Opening stock 1,16,800
Purchases and sales 8,00,000 9,52,000
Returns 16,800 15,200
General expenses 40,000
Stationery 4,000
Loan from Andhra Bank 2,76,800
Cash 25,300
Apprentice premium 6,400
12% loan 20,000
Bad debts 13,600
Debtors and Creditors 2,56,000 80,000
Provision for bad debts 8,000
Interest 300
Sri Krishna Capital 2,82,000
Adjustments
(a) Purchases include Rs.8,000 being the Value of Machinery purchased in Jan
2000
(b) Provide 5% per cent per annum as interest on capital
(c) Provide 10% depreciation on machinery
(d) Value of stock on 31-12-2000 was Rs.68,000. [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?
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