Code No: RR312401

Set No. 1

III B.Tech I Semester Supplementary Examinations, February 2007 MANAGERIAL ECONOMICS & FINANCIAL ANALYSIS (Automobile Engineering) Time: 3 hours Max Marks: 80 Answer any FIVE Questions All Questions carry equal marks ⋆⋆⋆⋆⋆ 1. What is Managerial Economics. Explain its focus areas. 2. (a) What is meant by Elasticity of demand. (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.70, demand increases to 1100 units. [8+8] 3. (a) What are Isoquents? Explain the chief characteristics of Isoquents? (b) What do you understand by Least Cost Combination of inputs and how can it be achieved. [8+8] 4. (a) Define Market and explain how markets are classified? (b) What are the important features in any market structure? [12+4] [16]

5. Explain the features of sole trader form of organization. Discuss the merits and demerits of sole trader from of organization [16] 6. Write short notes on the following (a) Cumulative preference shares (b) Customer advances (c) Equity Shares (d) Fixed capital 7. The trail balance of Anil is given below, prepare the Trading Account, Profit & Loss Account for the year ending 31st December 2005 and Balance sheet as on that [4 ×4]

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Code No: RR312401 date. Debit Rs. Drawings and capital 72,000 Opening stock 2,05,000 Purchases and sales 6,80,000 Carriage inwards 15,000 Debtors and creditors 2,35,000 Cash 39,000 Salaries 2,53,000 Bills payable Insurance 1,12,000 Machinery 3,00,000 Wages 2,15,000 Commission received Trade expenses 69,000 Freight inwards 5,000 22,00,000 Adjustments (a) Closing stock was valued at Rs.3,50,000

Set No. 1
[16] Credit Rs. 6,00,000 14,05,000 1,43,000

42,000

10,000

22,00,000

(b) Provide a reserve for bad and doubtful debts @ 2 on debtors 8. (a) From the following information, calculate 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 Amounts receivables Turnover ratio form the following information. Rs. Net profit 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 ⋆⋆⋆⋆⋆ [16]

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Code No: RR312401

Set No. 2

III B.Tech I Semester Supplementary Examinations, February 2007 MANAGERIAL ECONOMICS & FINANCIAL ANALYSIS (Automobile Engineering) Time: 3 hours Max Marks: 80 Answer any FIVE Questions All Questions carry equal marks ⋆⋆⋆⋆⋆ 1. Define Managerial Economics. Explain its nature and scope. [16]

2. What are the various methods of demand forecasting. Evaluate various surveybased demand forecasting methods. [16] 3. (a) What do you understand by ‘Law of increasing Returns?’ What causes make increasing returns operate? [10] (b) When do you notice ‘constant returns’ arising? (c) Do diminishing returns apply only for agriculture or any other fields? [3] [3]

4. (a) What are the principal differences between monopoly and perfect competition? (b) Supplement your answer with appropriate diagrams in both the cases. [8+8] 5. What are the pros and cons of privatisation ? 6. Explain different types of working capital. [16] [16]

7. Explain the following concepts and illustrate their treatment with imaginary data. [16] (a) Depreciation (b) Prepaid expenses (c) Reserve for bad and doubtful debts (d) Income received in advance 8. What are the limitations of financial analysis? Discuss briefly. ⋆⋆⋆⋆⋆ [16]

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Code No: RR312401

Set No. 3

III B.Tech I Semester Supplementary Examinations, February 2007 MANAGERIAL ECONOMICS & FINANCIAL ANALYSIS (Automobile Engineering) Time: 3 hours Max Marks: 80 Answer any FIVE Questions All Questions carry equal marks ⋆⋆⋆⋆⋆ 1. State the Law of Demand. Explain why the demand curve slopes downwards. Are there any exceptions to the law? [16] 2. What are the needs for demand forecasting. Explain the various steps involved in demand forecasting. [16] 3. (a) “To reach Breach even position means to reach zero point” In the light of the above statement explain how output, cost and revenue relationship can be established. (b) What are its limitations? (c) Use suitable diagrams. 4. (a) Define Market and explain how markets are classified? (b) What are the important features in any market structure? 5. Explain the features and problems of public sector enterprises in India 6. Write short notes on the following : (a) Shares (b) Bonds and debentures (c) Working capital (d) Current liabilities [4×4] [12+4] [16] [8+4+4]

7. You are required to prepare Trading and profit & Loss Account in the books of Amarnath for the year ending 31st December, 2005 and Balance Sheet as on that date after considering the following adjustments. [16] (a) Closing stock was valued at Rs.50,000 (b) Prepaid rent amounted Rs.410

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Code No: RR312401 Debit balances Rs. 18,750 9,250 7,000 4,510 840 3,850 450 1,120 16,700 46,850 4,300 1,13,620

Set No. 3
Capital Purchase returns Bills payable Sales Creditors Credit balances Rs. 35,000 120 5,000 63,500 10,000

Buildings Machinery Debtors Rent Drawings Cash at bank Sales returns Salaries Opening stock Purchases Wages

1,13,620 [16]

8. (a) From the following information, calculate 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 Amounts receivables Turnover ratio form the following information. Rs. Net profit 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 ⋆⋆⋆⋆⋆

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Code No: RR312401

Set No. 4

III B.Tech I Semester Supplementary Examinations, February 2007 MANAGERIAL ECONOMICS & FINANCIAL ANALYSIS (Automobile Engineering) Time: 3 hours Max Marks: 80 Answer any FIVE Questions All Questions carry equal marks ⋆⋆⋆⋆⋆ 1. Write briefly on the following: (a) Giffin’s paradox (b) Demand schedule (c) Income effect (d) Joint demand 2. What are the needs for demand forecasting. Explain the various steps involved in demand forecasting. [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. (a) What are the features of monopolistic competitions? (b) Explain the differences between monopolistic competition and perfect competition. [8+8] 5. What are the salient features of a company ? Why it has become the most popular form of organization ? [16] 6. Examine the following 3 project proposals and evaluate them based on (a) PBP Method (b) ARR Method. (ARR on original investment) Initial Investment is Rs. 10,00,000/- each for all the three projects Year 1. 2 3. 4 Cash inflows (Rs.) Project-A Project-B Project-C 5,00,000 6,00,000 2,00,000 5,00,000 2,00,000 2,00,000 2,00,000 2,00,000 6,00,000 3,00,000 4,00,000 [4+4+4+4] [16]

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Code No: RR312401

Set No. 4

7. How are Accounts finalized at the end of an Accounting period with the help of a Trial balance? Illustrate. [16] 8. Discuss the importance of Ratio Analysis for inter firm and intra-firm comparison, including circumstances responsible for its limitations, if any. [16] ⋆⋆⋆⋆⋆

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