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UNIT-I 1. a) Define Managerial Economics.

Explain its Nature And Scope OR b)Define Demand and explain the factors that influence the demand of a product 15M 2. a) State the Law of Demand. What are the various factors that determine the demand for a Mobile Phone? OR b) What is meant by Elasticity of Demand? How do you measure it? 3. a) What are the needs for Demand Forecasting? Explain the various method of demand forecasting OR b) Explain the various factors that influence the demand for computer. 4. a) Define price-elasticity of demand. What are the various degrees of price elasticity? OR b) Point out the importance of Managerial Economics in decision making 5. a) Define law of demand .explain its assumptions & exceptions OR b) What is meant by elasticity of demand? Explain its significance 15M 15M 15M 15M 15M 15M 15M 15M 15M

UNIT-II 1.a)Define Cost. How are costs classified? Explain any five important cost concepts useful for managerial decisions OR b) You are required to calculate. Margin of Safety Total sales Variable cost from the following figures; Fixed costs Rs. 12, 000 Profit Rs. 1, 000 ( 5M+5M+5M) 15M

Break-Even Sales Rs.60, 000 2.a) State and explain Break-Even analysis and explain its importance. b) What are its limitations? Use suitable diagrams. OR c) A company reported the following results for two periods. Period I II Sales Rs.20,00,000 Rs.25,00,000 Profit Rs.2,00,000 Rs.3,00,000 15M 8M 7M

Ascertain the BEP, P/V Ratio, Fixed cost and Margin of Safety. 3.a)You are given the following information about two companies in 2000 Particulars Sales Fixed Expenses Variable Expenses Company A Rs.50,00,000 Rs.12,00,000 Rs.35,00,000 Company B Rs.50,00,000 Rs.17,00,000 Rs.30,00,000

You are required to Calculate (For Both Companies) a) BEP (in Rs.) b) P/V Ratio c) Margin of safety b)Explain Economics of scale. Explain the factor, which causes increasing returns to scale 15M 15M

4.a) What are isocost curves and iso quants? Do they interest each other OR b) Short notes on Fixed cost Variable cost Implicit cost with example



5.a)Define production function. Discuss in detail the different types of production functions 15M OR b The PV ratio of Sujay Books Ltd., is 40% and Margin of safety is 30%. You are required to work out the BEP and Net profit, if the sales volume is Rs.1,40,000 15M


1. a) What is perfect competition? What are its features?


b) How is price-output determined under conditions of Perfect Market Competition? 7M OR c) Explain the features of Monopoly. d)how is price-out determined under condition of monopoly 8M 7M

2. a) Define Market and explain how markets are classified? b) What are the important features in Market structure? OR b) What are the salient features Partnership firm c) Explain Different kinds of partners. 3.a)What are the characteristic features of a sole trader form of organization? b) Describe the advantages and disadvantages of sole trader form of organization? OR c) What do you mean by Joint Stock Company? What are the salient features? d) Describe the advantages and disadvantages of Joint Stock Companies? 4.a) Analyses the Formation of Joint Stock Company? b) What are the different types of companies? OR c) What are the characteristics of a Business Unit? d) What are the advantages and limitations of partnership firm? 5. a) What are features of public enterprises .explain its merits and de merits OR

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9M 6M 8M 7M

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8M 7M 15M

b)Small is beautiful. Do you think, this is the reason for the survival of the sole trader from of business organization? Support your answer with suitable examples 15M

UNIT-IV 1. a)Determine the Pay Back Period for the information given below The project cost is Rs. 20,000 The life of the project is 5 years The cash flows for the 5 years are Rs.10,000, Rs.12,000; Rs.13,000; Rs.11,000; and Rs. 10,000 respectively and Tax rate is 20% OR b)Define capital budgeting explains its methods 15M 15M

2. a)Mahesh Enterprises is considering of purchasing a CNC Machine. The following are the earnings after tax from the two alternative proposals under consideration each costing Rs. 8, 00,000. Select the better one, if the company wishes to operate at 10% rate of return. Year 1 Proposal I Proposal II Present value of Re @ 10% 80000 240000 0.909 Year 2 240000 320000 0.826 Year 3 320000 400000 0.751 Year 4 480000 240000 0.683 15M Year 5 320000 160000 0.620

OR b)Define capital budgeting explain its features 15M

3.a)A Company has at hand two proposals for consideration. The cost of the proposals in both the cases is Rs. 5, 00,000 each. A discount factor of 12% may be used to evaluate the proposals. Cash inflows after taxes are as under. Year Proposals X(Rs.) 1 2 3 4 5 1,50,000 2,00,000 2,50,000 1,50,000 1,00,000 Proposals Y(Rs.) 50,000 1,50,000 2,00,000 3,00,000 2,00,000

Which one will you recommend under NPV method? OR b) Briefly explain about sources of company finance 4. a) Explain the factors affecting the requirements of working capital. OR b) Following is the Balance Sheet of XYZ company as on 31st Dec 2000


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Equity share capital Capital Reserve 8% loan on Mortgage Trade Creditors Bank overdraft

20,000 Goodwill 10,000 Fixed assets 16,000 Stocks 8,000 Debtors 6,000 Investments Cash in hand

12,000 28,000 6,000 6,000 2,000 6,000



Calculate changes of net working capital 5. a) Define payback period explain its advantages and limitation b) Define ARR .explain its advantages and limitations 15M 15M

UNIT-V 1.a)What do you understand by Double Entry Book Keeping? What are its advantages? OR b) Journalize the following transactions and prepare a cash ledger. 1. Ram invests Rs. 10, 000 in cash. 2. He bought goods worth Rs. 2000 from shyam. 3. He bought a machine for Rs. 5000 from Lakshman on account. 4. He paid to Lakshman Rs. 2000 5. He sold goods for cash Rs.3000 6. He sold goods to A on account Rs. 4000 7. He paid to Shyam Rs. 1000 8. He received amount from A Rs. 2000 15M 15M

2. a) Define accounting .Explain the main objectives of Accounting and its advantages Or b) From the following list of balances prepare a Trial Balance as on 30-6- 2009 Rs. I II III Iv V VI VII VII Ix X XI Opening Stock Wages Sales Bank loan Coal coke Purchases Repairs Carriage Income tax Debtors 1800 1000 12000 440 300 7500 200 150 150 2000 Xiii Xiv Xv Xvi Xvii Xviii Xix Xx Xxi Xxii Xxiii Plant Machinery tools Lighting Creditors Capital Misc. Receipts Office salaries Office furniture Patents Goodwill Cash at bank


15M Rs. 750 180 230 800 4000 60 250 60 100 1500 510

Leasehold premises 600


Cash in hand


3.a)The following is the Trial Balance of Abhiram, was prepared on 31st March 2006. Prepare Trading and Profit& Loss Account and Balance Sheet. 15M

Debit Rs. Capital ------

Credit Rs. 22000

Opening stock Debtors and Creditors Machinery Cash at Bank Bank overdraft Sales returns and Purchases returns Trade expenses Purchases and Sales Wages Salaries Bills payable Bank deposits TOTAL

10000 8000 20000 2000 -----4000 12000 26000 10000 12000 ------6600 110600

-----12000 ------------14000 8000 ------44000 ------------10600 ------110600

Closing Stock was valued at Rs.60, 000 OR b) 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 Rs. Stock Debtors Bills Receivables Cash in Hand Bills payable Bank overdraft 9% Debentures Sales for the year Gross profit 5, 00,000 3, 50,000 70,000 10,000 20,000 10,000 18,000 15,000 15M 31. March 2002 Rs. 25,000 20,000 5,000 15,000 20,000 2,000 5, 00,000 3, 00,000 50,000

Compute for both the years the following: (a) Current Ratio (b) Acid Ratio (c) Stock Turnover Ratio. Also interpret the results.

4.a) From the following information, calculate i. Debt-Equity ratio ii. Current ratio Rs. Debentures 1,40,000 Bank balance Long term Loans General reserve Creditors Bills payable Share capital 66,000 14,000 1,20,000 40,000 70,000 Sundry Debtors


Rs. 30,000


b) What are the limitations of Ratio Analysis? Does ratio analysis really measure the financial performance of a company? 5.a) Define journal explain its advantages and disadvantages OR b) Distinguish between journal and ledger 15M 15M 15M