1. How long will it take any sum to triple itself at 5% simple interest rate? 2.

List three factors affecting price elasticity of demand. 3. Draw a neat sketch of present worth function graph. 4. Where a line organization is suitable? 5. State the two sides of a balance sheet 6. What are the objectives of pricing policies 7. What are the disadvantages of accounting rate of return method? 8. What is BEP? 9. What is meant by contribution in BEA? 10. Write the difference between fixed and variable cost. 11. Distinguish between technical and economical efficiency. 12. What would be the future value of Rs 100 invested in a fixed deposit for 5 years with an interest rate of 15% compounded annually? 13. What is time value of money? 14. Define IRR and MARR. 15. How does present worth method help in comparing alternatives? 16. What is depreciation fund? 17. Give the expression for the calculation of depreciation under sum of years digits method of depreciation. 18. Write about the cash flow in a simple economy. 19. How much will a piece of property have to increase in value over the next 5 years, if it is to earn 10% per year on the purchase price? 20. Calculate the present worth of the following paymentsRs 5,000 in year 3, in 10,000 in year 5.

1. What are the ways by which the economic efficiency can be improved? 2. Illustrate the effect of price on demand and supply; illustrate with the help of a diagram. 3. Define value engineering (VE)/ value analysis (VA) 4. Distinguish between breakdown maintenance and preventive maintenance 5. Write short notes on reasons for replacement? 6. Define the following: Depreciation and book value 7. Distinguish between declining balance method of depreciation and double declining balance method of depreciation. 8. What is meant by sunk cost? 9. List few factors that need to be considered in making a make or buy decision. 10. What are cash equivalents? 11. Is it possible for a cash balance to decrease when the company makes a net profit for any given period? 12. What is preventive maintenance? 13. What are the major factors that determine the economic life of an asset? 14. List few causes of depreciation. 15. What are the assumptions for straight line method of calculating depreciation? 16. What is preventive maintenance? 17. What are all the types of replacement problem? 18. State the objectives behind provision of depreciation. 19. What is sinking fund method of depreciation?

20. Define the following: Depreciation and book value PART B 1. (a) (i) Explain flow in economy in detail. (ii)Define Wealth. Draw the tree diagram for wealth and explain it. (iii)Explain law of diminishing marginal utility. (Or) (b) (i) Explain all the types of elasticity of supply with neat diagram. (ii)Explain the determinants of demand in detail. 2. (a) (i) Compare cooperative society and Joint Stock Company. (ii)Explain the functions of central banking system. (Or) (b) (i)Explain cash flow statement and fund flow statement in detail. (ii)Explain the objective of management accounting (iii)State the purpose of current ratio.

3. (a) A factory can sell 2000 units of its product in home market at Rs 200 each. The marginal cost per unit is Rs 14 and fixed over heads are Rs 5000.It can also sell another 2000 units in the foreign market at Rs 16 each. The additional packing and export expenses will be Rs 1per unit. Advice the management suitably. (ii) Explain marginal cost pricing. Write the advantages of it. (Or) (i) A company wants to purchase a TIG welding machine (project proposal) for its fabrication shop. The cost of the TIG welding is Rs 60,000 and has a scrap value of Rs 20,000.The cash inflow before depreciation and tax for the next 5 years has been forecasted and shown in the table: Year Cash flow (Rs) 1 12,000 2 13,000 3 15,000 4 17,000 5 22,000

If the income tax rate is 50% and the depreciation is based on straight line method, find the average rate of return for the project proposal. (ii)Write the advantages and disadvantages of payback period method.

21. (a) (i) Enumerate and explain the types of appraisal process. (ii) From the following figures find out (1) The break even sales quantity (2) The break-even sales (3) If the production quantity is 30,000, find contribution and margin of safety. Fixed cost = Rs 10, 00,000; Variable cost per unit =Rs 50; Selling price per unit= Rs 100. (Or) (b) (i) Bring out the scope of engineering economics with appropriate examples. (ii)A concern manufacturing a domestic appliance proposes to put up an improved model in the market and the selling price for the same to be decided. The selling price will cover the overheads and ensure the proportion of profit on sales as before. The material in the new model will cost Rs 4,000 and the direct wages would be Rs 2,000. Following figures relate to the previous year: Stock of material on 1st April 2006 Rs 2, 00,000

Stock of material on 31st March 2007 Rs 2, 20,000 Purchase of raw material in this period Rs 5, 20,000 Manufacturing wages Rs1, 60,000 Works overhead RS 80,000 Administrative and sales overhead Rs 80,000 Sales during the year Rs 9, 02,000 Suggest a selling price. Overhead absorption based on % of direct labour. 22. (a) (i)Explain the process of material selection in new product development. (ii) From the following details, calculate the breakeven point. What will be the selling price per unit if breakeven point to be brought to 9,000 units: Variable cost per unit Rs 750 Fixed expenses Rs 27, 00,000 Selling price per unit Rs 1,000. (Or) (b) (i) A manufacturing company has extra capacity which can be used to produce gears that the company has been buying for Rs 300 each. If the company makes the gears, it will incur material cost of Rs 90 per unit, labour cost of Rs 120/unit and variable cost of Rs 30 per unit. The annual fixed cost associated with the unused capacity is Rs 2, 40,000. Demand over the next year is estimated at 4,000 units.

> Should the company make the gears or continue to buy? > Suppose the capacity could be used by another department for the production of some pump components that would cover its fixed and variable cost and contribute Rs 90,000 to profit. Which would be more advantageous, gear production or pump components production?

23. (a)The directors of a company are perplexed at their cash position at the end of last year and the profit and loss account balance revealed in the balance sheet. According to them, the profit should be more and cash inflow should definitely be more since: (i)They have issued 7 % redeemable preference shares for Rs 10,000. (ii) They should have sold a discarded machinery for Rs 1,000 and (iii) Fresh debentures issued for Rs 1,000. The following is a comparative statement of their balance sheet. Advise them suitably. (Or) (b) (i) Why study of competition in the market is essential. (ii)Differentiate perfect oligopoly and imperfect oligopoly.