can you give me mbaIst year Accounting & Finance question paper?

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1. paafamily
   

   MANAGEMENT PROGRAMME
   Term-End Examination
   June,2OO8
   
   MS-4 : ACCOUNTING AND FINANCE FOR MANAGERS
   
   Time : 3 hour               Maximum Marks : 100 (Weishtage 70%)
   
   Note : Attempt any five questions. All question carry equal marks. Use of calculators is allowed.
   
   l. (a) What do you understand by the concept of conservatism ? Why is it also called the concept of prudence ? Why is it not applied as strongly today as it used to be in the Past ?
   
   (b) What is a Balance Sheet ? How does a Funds Flow Statement differ from a Balance Sheet ? Enumerate the items which are usually shown in a Balance Sheet and a Funds Flow Statement .
   
   2. (a) Why does depreciation need to be provided on fixed assets and what  are the usual method of providing  depreciation?
   
   (b) Discuss the role of the Board of Directors in dividend decision.
   
   3. What do you understand by Discounted Cash Flow Techniques of Capital Budgeting ? Briefly explain the Net Present Value Method and Internal Rate of Return Method. which of the two would you rank better and why ?
   
   4. Distinguish between :
   (a) Financial Leverage and operating Leverage
   
   (b) Cash Budget and Cash Flow Statement
   
   (c) ‘First in, First out and ‘Last’, First out’ systems of Inventory Valuation.
   
   (d) Preference shares and Rights shares
   
   5. A company manufactures a single product in its factory utilizing 600% of its capacity. The selling price and cost details are given below :
   Rs.
   Sales (6,000 units) 5,40,000
   Direct materials 96,000
   Direct labour 1,20,000
   Direct expenses 19,000
   Fixed overheads :
   Factory 2,00,000
   Administration 21,000
   Selling and Distribution 25,000
   
   12.5% of factory overheads and 20% of selling and distribution overheads are variable with production and sales. Administrative overheads are wholly fixed. Since the existing product could not achieve budgeted level for two consecutive years, the Company decides to introduce a new product with marginal investment but largely using the existing plant and machinery.
   
   The cost estimates of the new product are as follows :
   Cost elements Rs. per unit
   Direct materials 16.00
   Direct labour 15.00
   Direct expenses 1.50
   Variable factory overheads 2.00
   Variable selling and distribution overheads 1.50
   
   It is expected that 2,000 units of the new product can be sold at a price of Rs. 60 per unit. The fixed factory overheads are expected to increase by 10%, while fixed selling and distribution expenses will go up by Rs. 12,500 annually. Administrative overheads remain unchanged.
   However, there will be an increase of working capital to the extent of Rs. 75,000, which would take the total cost
   of the project to Rs. 8.75 lakh.
   
   The company considers that 20o/o pre-tax and interest return on investment is the minimum acceptable to justify
   any new investment.
   
   You are required to
   
   (a) Decide whether the new product be introduced.
   
   (b) Make any further observation/recommendations about profitability of the company on the basis of the above data , after making assumption that the present investment is Rs. 8 lakh.
   
   6- Explain fully the following statements :
   (a) “Lower the Break-even point, better it is.,,
   (b) “Greater the variability of cash flows, higher should be the minimum cash balance .,,
   (c) “Weighted average cost of capital would always be higher, if the market value weights are used”.
   (d) “Capitalisation of reserves is different from capital reserves”.
   
   7. ‘ Why do you understand by the term ‘pay-out ratio’ ? What factors are taken into consideration while determining
   pay-out ratio ? should a company follow a fixed pay-out ratio policy ? Discuss fully.
   
   8. From the ratios and other data given below for Bharat Auto Accessories Ltd. indicate your interpretation of the
   company’s financial position, operating efficiency and profitability.
   Year I Year II Year III
   Current Ratio 265% 278% 302%
   Acid Test Ratio 115% 110% 99%
   Working Capital Turnover (times) 2.75 3.00 3.25
   Receivables Turnover 9.83 8.41 7.20
   Average Collection Period (Days) 37 43 50
   Inventory to Working Capital 95% 100% 110%
   Inventory Turnover (times) 6.11 6.01 5.41
   Income per Equity Share 5.10 4.05 2.50
   Net Income to Net Worth 11.07% 8.5% 7.0%
   Operating Expenses to Net Sales 22% 23% 25%
   Sales increase during the year 10% 16% 23%
   Cost of goods sold to Net Sales 70% 71% 73%
   Dividend per share Rs. 3 Rs. 3 Rs. 3
   Fixed Assets to Net Worth 16.4% 18% 22.7%
   Net Profit on Net Sales 7.03% 5.09% 2.0%

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