Code: 9AHS401

1
(Common to CE, BT, ME, EEE, ECC and MCT)

B.Tech III Year I Semester (R09) Regular & Supplementary Examinations December/January 2013/14 MANAGERIAL ECONOMICS & FINANCIAL ANALYSIS Time: 3 hours Answer any FIVE questions All questions carry equal marks ***** 1 2 3 Define demand. Explain various factors determine demand for a commodity. What is a new product? Explain how did you forecast demand for new products. Illustrate. A machine tools factory has a plant capacity of enough hours 9000. Annual fixed charges are of Rs.50, 000 per year. It can produce two products of X and Y. It has three options: make X or make Y or make some units of X and some units of Y. Look at the following data: X Y Selling price Rs.2,500 Rs.4,000 Variable cost (Rs) 1,000 2,000 Demand 2500 units 5000 units Time taken for production 3 hours 5 hours What product mix will maximize the net profits of the factory? Calculate the maximum net profit. Distinguish between: Perfect competition and monopoly. Monopoly and monopolistic competition. Distinguish between a partnership and a joint stock company. Give various examples of capital budgeting decisions. Classify them into specific kinds. Journalize the following transactions: 2007 Jan,1 Goral started his business with the capital Jan,5 Furniture Rs. 3,000 and stock Jan,8 Deposited in Andhra Bank Jan,13 Goods purchased from Hari Jan,16 Goods sold to Srinivas on cash Jan,20 Goods returned to Hari Jan,24 Commission Received Jan,28 Salaries paid Jan,30 Rent paid Jan,31 Sales returns Define ratios. Explain in different classifications of ratio analysis. Max Marks: 70

4 (a) (b) 5 6 7

Rs. 10,00 2,00 8,00 7,00 6,50 400 800 5,00 2,00 300

*****

Code: 9AHS401

2
(Common to CE, BT, ME, EEE, ECC and MCT)

B.Tech III Year I Semester (R09) Regular & Supplementary Examinations December/January 2013/14 MANAGERIAL ECONOMICS & FINANCIAL ANALYSIS Time: 3 hours Answer any FIVE questions All questions carry equal marks ***** 1 2 Define managerial economics. Explain its nature and scope. From the following data, using method of least squares, estimate the sales for the years 2011 and 2012. Year 2004 2005 2006 2007 2008 2009 2010 Sales (Rs. in Lakhs) 140 100 170 180 200 210 190 What are economies of scale? What are its types? Illustrate. What is market? Distinguish between perfect and imperfect markets. Differentiate between: Private company and public company. Company and partnership firm. What is the importance of capital budgeting? How do the discounting models differ from non-discounting models? Journalize 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 Srinivas. 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 Srinivas Rs.1,000 8 He received amount from A Rs.2,000 How would you analyze financial position of a company from the point of view of? An investor. A creditor. A financier Substantiate your presentation with suitable examples. Max Marks: 70

3 4 5 (a) (b) 6 (a) (b) 7

8 (a) (b) (c)

*****

Code: 9AHS401

3
(Common to CE, BT, ME, EEE, ECC and MCT)

B.Tech III Year I Semester (R09) Regular & Supplementary Examinations December/January 2013/14 MANAGERIAL ECONOMICS & FINANCIAL ANALYSIS Time: 3 hours Answer any FIVE questions All questions carry equal marks ***** 1 2 (a) (b) 3 4 5 6 What is demand? Differentiate extension in demand and increase in demand. Explain with examples: Price elasticity of demand Cross elasticity of demand. How do you determine BEP when there is an increase in fixed cost? Illustrate. Define market. Explain the importance of time factor in price determination. Define sole trade and differentiate between sole trade and partnership. Satish & Co. is considering the purchase of machine. Two machines X and Y each costing Rs.50, 000 is available. Earnings after taxes are expected to be as under: Year 1 2 3 4 5 Machine X 15,000 20,000 25,000 15,000 10,000 Machine Y 5,000 15,000 20,000 30,000 20,000 Estimate the two alternatives according to: Payback method and NPV method a discount rate of 10% is to be used. Define the profit and loss accounts in the books of accounts of a business firm. Explain difference between ledger and journal. Explain the need to interpret financial statements. In the content of profitability, what are the relevant ratios? Max Marks: 70

(a) (b) 7 (a) (b)

*****

Code: 9AHS401

4
(Common to CE, BT, ME, EEE, ECC and MCT)

B.Tech III Year I Semester (R09) Regular & Supplementary Examinations December/January 2013/14 MANAGERIAL ECONOMICS & FINANCIAL ANALYSIS Time: 3 hours Answer any FIVE questions All questions carry equal marks ***** 1 (a) (b) 2 3 (a) (b) (c) (d) (e) (f) Answer the following. Important features of managerial economics. Managerial economics relation with other disciplines. Explain how point elasticity is more focused than arc elasticity. Illustrate. A company makes a single product with a sales price of Rs.20 and a variable cost of Rs.12 per unit, fixed costs are Rs.1, 20, 000. Calculate: Number of units to break even. Sales at breakeven point. Contribution to sales ratio (in terms of percentage). What number of units will need to be sold to achieve a profit of Rs.20, 000? What level of sales will achieve a profit of Rs.60, 000? Given an decrease in variable cost by 5% per unit, and increase in the fixed costs by Rs.20, 000 per annum, what will be the new BEP in units. What are the causes for the formulation of monopoly? Discuss how the monopolist can formulate output and pricing decisions in the short run period. Define company. Explain its features. What are its advantages and disadvantages? Explain any two methods of appraising the capital investment proposals with example. Journalize the following transactions: January,1 Raju commenced business worth Rs.1,00,000 4 Sold goods to Chandu worth Rs.40,000 6 Brought goods for cash worth Rs.20,000 10 Received interest worth Rs.10,000 12 Paid in to bank worth Rs.15,000 15 Withdraw cash from bank worth Rs.2,000 18 Sold goods to Venkat worth Rs. 40,000 26 Sold goods for cash worth Rs.40,000 28 Paid for rant, and rates worth Rs.40,000 31 Propitiator for personal use worth Rs.40,000 Write short notes in the following: Liquidity ratios. Inventory turnover ratio. Leverage ratio. Operating ratio. Max Marks: 70

4 (a) (b) 5 (a) (b) 6 7

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

*****