h

t
t
p
:
/
/
c
s
e
t
u
b
e
.
t
k
/

MG2454 ENGINEERINGECONOMICS AND FINANCIALACCOUNTING

DEPARTMEN T OF COMPUTER SCIENCE AND ENGINEERING



SUB.CODE : MG2454 YEAR/SEM : IV/VII

UNIT I

PART-A

1. What is meant by Economics?

2. Define Engineering. Economics.
.
3. What is managerial economics?

4. What are objectives of managerial economics?

5. Differentiate between micro economics & macroeconomics.

6. Define Decision and Managerial decision?

7. Difference between risk and uncertainty.

8. Write a note an operations research and economics?

9. What are the important objectives of profit maximization

10. What are the different types of the economic systems?

11. Sate the law of supply?

12. Mention any 3 important scopes of managerial economics?

13. What are the few important optimizing models?

14. What is meant by positive and normative science?
15. What is the importance of Economics?












Page 1
http://csetube.weebly.com/
h
t
t
p
:
/
/
c
s
e
t
u
b
e
.
t
k
/




16. What are the different types of managerial decision?

17. What do you understand by the process of decision making?

18. What is income effect?

19. What are the basic tools of managerial economics?

20. Mention any three types of managerial decisions

PART-B
16 MARKS

1. Discuss the nature and scope of managerial economics? (16)
2. How far is profit maximization the basic objective of a firm? What are the reasons for?
Limiting period. (16)
3. Explain Baumes sales maximization theory? (16)
4. Explain different types of managerial decisions. ? (16)
5. Decision making is central in the process of management Discuss. ? (16)
6. What do you understand by the process of decision making? (16)







UNIT II
PART-A

1. What do you meant by demand?

2. List out the factors influencing demand?

3. What is demand forecasting?

4. What is Delphi-Method?

5. What are Geffens goods?

6. Difference between forecast & prediction.

7. What is demand function?

8. What are consumers goods & producers goods?



Page 2
http://csetube.weebly.com/
h
t
t
p
:
/
/
c
s
e
t
u
b
e
.
t
k
/


9. What is elasticity of demand?

10. Difference between price elasticity & income elasticity of demand.

11. List out the measurement of price elasticity of demand?

12. What is law of supply?

13. Differentiate active and passive forecasting demand

14. What are inferior goods?

15. Difference between supplementary good & complementary goods.

16. List out the uses of price elasticity of demand?

17. What is the Time series?

18. What do you mean by parametric techniques?

19. What do you mean by end use method?

20. What are ceteris and paribus

PART-B
16 MARKS



1. What is demand function? Explain the importance determinants of demand? (16)
2. Define price elasticity of demand. Describe the various methods of measuring the
Same. (16)

3. Define elasticity of demand and distinguish its types. Discuss the role of elasticity
of demand. .? (16)

4. Distinguish between price elasticity, income elasticity, and cross elasticity of
Demand. .? (16)

5. Define Supply and discuss the law of supply. .? (16)

6. What is meant by demand forecasting? Explain the methods used in demand
Forecasting and their limitations. .? (16)





Page 3
http://csetube.weebly.com/
h
t
t
p
:
/
/
c
s
e
t
u
b
e
.
t
k
/












UNIT III
PART-A

1. Define cost.

2. What is production function?

3. What are the important of production function?

4. Write a short note ISO quant?

5. What is constant return to scale?

6. What is least cost combination?

7. What are the three stages of production function?

8. What is P roduction?

9. What are the different properties of ISOquants?

10. What is Economics of scale?

11. What is cost output relationship?

12. What is opportunity cost?

13. Difference between sunk cost and incremental cost?

14. Distinguish between Economic cost and Accounting cost?

15. What is breakeven point?

16. What is the different estimation cost output relationship?

17. What are the assumptions under cobb Douglass production function?

18. Define ISO cost?

Page 4
http://csetube.weebly.com/
h
t
t
p
:
/
/
c
s
e
t
u
b
e
.
t
k
/




19. What is the rule of COBB-DOUGLAS function?

20. What is the difference Dis-economics of large scale production?






PART-B
16 MARKS

1. Explain the nature and managerial uses of production? (16)
2. Explain the law of diminishing marginal returns? (16)

3. Explain and discuss the production function of Cobb- Douglas type. .? (16)

4. What is the difference between return to scale and return to production? (16)

5. Discuss the properties of Isoquants. .? (16)

6. Explain the features of S hort-run Average Cost curve and Long-run Average- Cost
Curve? (16)

7. Write an essay on Cost-Output relation in the short run and long run? (16)




UNIT IV
PART-A

1. What is pricing?

2. What is price discrimination?

3. What is full cost pricing?

4. What is marginal cost pricing?

5. Write a note on cost plus pricing?

6. List out the various types of competition existing in the market?

7. What is perfect competition?

8. Give three features of perfect competition?


Page 5
http://csetube.weebly.com/
h
t
t
p
:
/
/
c
s
e
t
u
b
e
.
t
k
/




9. What is a Market?

10. What is monopolistic competition?

11. What is oligopoly?

12. Give 3 features of oligopoly?

13. Difference between monopoly & oligopoly?

14. List out the various pricing methods?

15. What is product differentiation?

16. What is selling cost?

17. What is P ure O ligopoly?

18. What do yo u mean by Marginal cost pricing?

19. What is leader ship pricing?

20. List the various factors determining pricing?

PART-B
16 MARKS

1. What are the different pricing methods adopted in practice? (16)
2. What is pricing? Explain any four different methods of pricing known to you. ? (16)

3. Discuss various techniques of price formulation in actual business situation. ? (16)

4. Distinguish between perfect competition and monopoly. ? (16)

5. Explain different types of competitive situations that may possibly be found in a
Market. ? (16)

6. Define oligopoly. State its importance features. ? (16)
7. Discuss the uses and limitation of marginal cost pricing. ? (16)

8. Distinguish between Cost approach to pricing and market approach to pricing. ? (16)


UNIT V


Page 6
http://csetube.weebly.com/
h
t
t
p
:
/
/
c
s
e
t
u
b
e
.
t
k
/


PART-A

1. What is meant by financial accounting?

2. Difference between finance accounting & cost accounting.

3. What is cash book?

4. What is cash flow statement?

5. What is current Ratio?

6. What is debt equity ratio?

7. What are the objectives of cash flow statement?

8. What is gross profit ratio?

9. What are the sources of funds?

10. How does cash flow statement differ from fund flow statement?

11. What is a Balance S heet?

12. What is Double Entry system?

13. What are sources of funds?

14. What is Internal Rate of return?

15. Define payback period?

16. What is Net P resent value?

17. What is working capital?

18. What is a debenture?

19. Write a note on Acid-Test ration?

20. What is capital Budgeting?







Page 7
http://csetube.weebly.com/
h
t
t
p
:
/
/
c
s
e
t
u
b
e
.
t
k
/


PART-B
16 MARKS




1 . From the following Trail Balance. Prepare i) trading and P rofit and Loss a/c (ii) Balance
sheet



Trial Balance as on 31.12.2005

Debit Balance Rs Credit Balance Rs

Cash in Hand
Machinery
Stock
Bills Receivables
Sundry Debtors
Wages
Land
Carriage Inwards
Purchases
Salaries
Rent
Postage
Return Inwards
Drawings
Furniture
Interest
Cash at Bank
2,000
60,000
50,000
1,600
50,000
70,000
40,000
2,400
24,000
24,000
4,000
1,000
3,200
10,000
18,000
600
6,600
--------- --------
5, 23,400
-----------------
Capital
Sales
Sundry Creditors
Bank Overdraft
Return Outwards
Discount Received
Bills Payable
2, 00,000
2, 54,800
40,000
22,000
3,000
1,800
1,800
---------------
5,23,400
---------------





Adjustments: (16)

(i) Stock as on 31.12.2005 was Rs.4, 000
(ii) Outstanding Rent Rs.4, 000
iii P rovision for Bad debts is to be 10%





Page 8
http://csetube.weebly.com/
h
t
t
p
:
/
/
c
s
e
t
u
b
e
.
t
k
/




2. Prepare Trading and Profit and Loss Accounts for the year ended 31st March,
1990 and Balance S heet as at the date from the following Trail Balance of K.Rama
Rao (16)


Debit Balance
Rs Credit Balance Rs

Drawings
Good Will
Land and Buildings
Plant and Machinery
Loose Tools
Bills Receivable
Stock,1st April , 1989
Purchases
Wages
Carriage O utwards
Carriage Inwards
Coal
Salaries
Rent,Rates,&Taxes
Discount
Cash at Bank
Cash in Hand
Sundry Debtors
Repairs
Printing and
Stationery
Bad Debts
Advertisements
Sales Returns
Furniture
General Expenses
Adjustments:
45,000
80,000
60,000
40,000
3,000
3,000
40,000
2, 51,000
20,000
500
1, 000
5, 800
35,000
2,800
1,500
25,000
400
45,000
1,800
500
1,200
3,500
2,000
11,000
5,250
Capital
Bills Payable
Creditors
Purchases Returns
Sales
1, 60,000
33,800
70,000
2,650
4, 18,000
(i C losing Stock on 31st March, 1990 was Rs 35,000.

(ii) Depreciate P lant and Machinery, Tools and F urniture by 10% and Land and
Building by 5%.?
(iii) Provide Rs 1,500 for Wages
(iv) Advertisement P repaid are Rs. 500

(v P rovide 5% on Debtors against bad debts and Discount




Page 9
http://csetube.weebly.com/
h
t
t
p
:
/
/
c
s
e
t
u
b
e
.
t
k
/





3. The following is the Trial balance of XYZ Ltd as on 30th June 2005.








Particular
Debit Rs
Credit Rs



Capital
Drawings
Stock on 1-7-2004
Sundry Creditors
Sundry Debtors
Machinery
Patents
Freehold land
Buildings
Sales
Purchases
Sales returns
Purchases returns
Cash at bank
Cash in hand
Insurance
General expenses
Salaries
Wages
Factory F uel
Carriage on purchases
Carriage on sales
Rent
-






































15,735
17,280
-
43,500
60,000
22,500
30,000
96,000
-
1, 22,025
2,040
-
7,890
1,620
1,800
9,000
45,000
25,440
14,190
6,120
9,600
-
-----------
5, 29,740
-----------
1, 86,000
-
-
80,900
-
-
-
-
-
2, 96,340
-
-
1,500
-
-
-
-
-
-
-
-
-
27,000
---------------
5, 29,740
----------------






































The following
adjustment is to be effected:
(i) stock on 30th June 2005 Rs.20,400

(ii) 5% on sundry debtors is to be written off as bad

Page 10
http://csetube.weebly.com/
h
t
t
p
:
/
/
c
s
e
t
u
b
e
.
t
k
/




(iii) Salaries for the month of june amounting to Rs 4, 500 were unpaid. (16)
iv) Rent Rs 3,000 is accrued but not received.
Depreciate machinery @ 10% and patents @ 20%
You are required to prepare Trading and Profit & loss Accounts and Balance S heet as on
30-06-2005.

4. What are the various methods of evaluating capital expenditure proposals? Merits
And demerits?

5. Project X initially cost Rs.25, 000.It generates the following cash inflows: (16)
Years
Cash inflow
Rs.
PV of Re.1 at 10%

1 9,000
2 8,000
3 7,000
4 6,000
5 5,000
0.909
0.826
0.751
0.685
0.621

Taking the cut- off rate as 10% suggest whether the project should be accepted or Not.





5. The Alpha Co .Ltd. considering the purchases of a new machine. Two alternative machine (A
and
B) have been suggested ,each having an initial cost Rs.40,000 and requiring Rs.20,000 as
Additional working capitals at the end of 1st yea r Earrings after taxation are expected to be as
follows? (16)

Year Machine A CASH F LOW MachineB CASH F LOW
1 40,000 1, 20,000
2 1, 20,000 1, 60,000
3 1, 60,000 2, 00,000
4 2, 40,000 1, 20,000
5 1, 60,000 80,000








Page 11
http://csetube.weebly.com/
h
t
t
p
:
/
/
c
s
e
t
u
b
e
.
t
k
/






The company has a target of return on capital of 10% on this basis, you are
Required to compare the profitability of the machine and state which alternative you
Consider financially

Year 1 2 3 4 5

PV at10%

0.91

0.83

0.75

0.68

0.62



6. A choice is to be made between two competing proposal which requires an equal investment o
Rs.50, 000 and are expected to generate net cash as under (16)





Year

Project I

Project II
1 25,000 10,000
2 15,000 12,000
3 10,000 18,000
4 Nil 25,000
5 12,000 8,000
6 6,000 4,000


The cost of capital of the company is 10%.The following are the present values at
10% Per annum.



Years 1 2 3 4 5 6

PV at 10% p.a 0.909 0.826 0.751 0.683 0.621 0.564
Calculate:
(a) Pay-Back Period
(b) Discount Cash flow method
(c) Excess present value index.








Page 12
http://csetube.weebly.com/
h
t
t
p
:
/
/
c
s
e
t
u
b
e
.
t
k
/








7. The following are the cash inflows and outflow of a certain project.

Years
Outflow Inflows Cash inflows

(16)




0 1, 50,000
1 30,000 30,000
2 30,000
3 50,000
4 60,000
5 40,000



The Salvage value at the end of 5 years is Rs.40, 000. Taking the cut off rate as
10%, calculate Net present value



Year 1 2 3 4 5

PV @ 10% 0.909 0.826 0.751 0.683 0.621



8. A company is considering two mutually exclusive projects. Both require an Initial
of Rs.50, 000 each can have a life of five years. The cost of capital of the Company
is 10% and tax rate is 50%. The depreciation is charged on straight line Method .The
estimated net cash inflow (before depreciation and tax) of two projects
Are as follows: (16)
Years: 1 2 3 4 5
Project-A (Rs 20000 22000 28000 25000 30000

Project-B) 30000 27000 22000 25000 30000

Which project should be accepted as per:
(a) Pay back period.
(b) Net present value


Page 13


























































(e) Internal Rate of Return
(c) Accounting Rate of Return
(d) Profitability Inde x

http://csetube.weebly.com/