II B.Tech I Semester Supplimentary Examinations, February 2008
MANAGERIAL ECONOMICS AND FINANCIAL ANALYSIS
( Common to Civil Engineering and Metallurgy & Material Technology)
Time: 3 hours Max Marks: 80
Answer any FIVE Questions
All Questions carry equal marks
⋆ ⋆ ⋆ ⋆ ⋆
1. Managerial Economics is the application of Economic Theory to business manage-ment. Discuss. [16]
2. What are the various methods of demand forecasting. Evaluate various survey-
based demand forecasting methods. [16]
3. Define production function. How is it helpful while taking output decisions? [16]
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. Define a Joint stock company and explain its basic features. [16]
6. (a) What is the need for capital budgeting?
(b) How do the discounting models overcome the limitations of non-discounting
models? [6+10]
7. Explain the following adjustments and illustrate suitably with assumed data. [16]
(a) Closing stock
(b) outstanding expenses
(c) Prepaid Income
(d) Bad debts.
8. (a) From the following information, calculate [16]
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 Interest Coverage ratio from 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
⋆ ⋆ ⋆ ⋆ ⋆
II B.Tech I Semester Supplimentary Examinations, February 2008
MANAGERIAL ECONOMICS AND FINANCIAL ANALYSIS
( Common to Civil Engineering and Metallurgy & Material Technology)
Time: 3 hours Max Marks: 80
Answer any FIVE Questions
All Questions carry equal marks
⋆ ⋆ ⋆ ⋆ ⋆
1. What is Managerial Economics? Explain its focus areas. [16]2. (a) What do you understand by Elasticity of demand. How is it classified.
(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.90, demand increases to 1500 units. [8+8]
3. (a) Distinguish between the following:
i. Average cost and Marginal cost
ii. Explicit cost and implicit cost
iii. Short run Average cost and Long run Average cost
iv. Variable cost and semi variable cost [4 × 2]
(b) Diagrammatically represent the relationship between Average Fixed Cost, Av-
erage variable cost, Unit cost and Marginal cost. [8]
4. (a) What are the salient features of Monopoly?
(b) In what different aspects monopoly is distinct from perfect competition. [8+8]
5. What are the factors that affect the choice and form of a business organization?
[16]
6. Explain different types of working capital. [16]
7. Give a brief account on the important records of Accounting under Double entry
system and discuss briefly the scope of each. [16]
8. (a) From the following information, calculate [16]
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
1 of 2
Code No: R059210102 Set No. 2
(b) Calculate Interest Coverage ratio from 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
⋆ ⋆ ⋆ ⋆ ⋆
Code No: R059210102 Set No. 3
II B.Tech I Semester Supplimentary Examinations, February 2008
MANAGERIAL ECONOMICS AND FINANCIAL ANALYSIS
( Common to Civil Engineering and Metallurgy & Material Technology)
Time: 3 hours Max Marks: 80
Answer any FIVE Questions
All Questions carry equal marks
⋆ ⋆ ⋆ ⋆ ⋆1. State the Law of Demand. What are the various factors that determine the demand
for a mobile phone? [16]
2. What are the various methods of demand forecasting. Evaluate various survey-
based 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? [3]
(c) Do diminishing returns apply only for agriculture or any other fields? [3]
4. (a) What are the circumstances under which monopoly situation can emerge?
(b) ‘The monopolist always enjoys economic profits, rather than normal profits.
Substantiate. [8+8]
5. What are the objectives behind starting public sector enterprises in the country?
To what extent have they fulfilled these objectives. [16]
6. Enumerate briefly the major steps in capital budgeting. [16]
7. The trial balance of Bharat is given below. Prepare the Trading and Profit & Loss
A/c for the year ending 31st December, 2005 and Balance sheet as on that date.
[16]
Debit. Rs Credit. Rs.
Drawings and Capital 10,550 1,19,400
Plant & Machinery 38,300
Sundry debtors and creditors 62,000 59,360
Wages 43,750
Purchases and Sales 2,56,590 3,56,430
Opening stock 95,300
Salaries 12,880
Insurance 930
Cash at bank 18,970
Interest on loan 14,370
Discounts allowed 4,870
Furniture 12,590
Loan payable 79,630
Furniture 43,990
6,15,090 6,15,090
1 of 2
Code No: R059210102 Set No. 3
Closing stock was valued at Rs.90,000.
8. Discuss the importance of Ratio Analysis for inter firm and intra-firm comparison,
including circumstances responsible for its limitations, if any. [16]
⋆ ⋆ ⋆ ⋆ ⋆
2 of 2
II B.Tech I Semester Supplimentary Examinations, February 2008
MANAGERIAL ECONOMICS AND FINANCIAL ANALYSIS
( Common to Civil Engineering and Metallurgy & Material Technology)
Time: 3 hours Max Marks: 80
Answer any FIVE Questions
All Questions carry equal marks
⋆ ⋆ ⋆ ⋆ ⋆
1. Explain the role of a Managerial Economist in a Business firm. [16]2. What are the needs for demand forecasting. Explain the various steps involved in
demand forecasting. [16]
3. (a) Distinguish between the following:
i. Average cost and Marginal cost
ii. Explicit cost and implicit cost
iii. Short run Average cost and Long run Average cost
iv. Variable cost and semi variable cost [4 × 2]
(b) Diagrammatically represent the relationship between Average Fixed Cost, Av-
erage variable cost, Unit cost and Marginal cost. [8]
4. (a) What do you understand by ‘Price discrimination’ and on what basis price
can be discriminated?
(b) Do you notice any benefit of price discrimination. [10+6]
5. (a) What are the different types of business organizations?
(b) What are the differences between proprietary and partnership business orga-
nizations? [8+8]
6. Are there any considerations other than profitability to be made in managerial
decisions about investment proposals? Explain them. [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. (a) From the following information, calculate [16]
i. Debt Equity ratio
ii. Current ratio
1 of 2
Code No: R059210102 Set No. 4
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 Interest Coverage ratio from 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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