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Pefm

This document contains a 10-part question about concepts in production economics and financial management. It asks the student to define terms like elasticity of demand, obsolescence, double entry bookkeeping, net present value, and leverage. It also asks the student to calculate depreciation using the declining balance method, prepare manufacturing accounts from a trial balance, and explain concepts like time value of money, ratio analysis, and methods of capital budgeting.

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118 views

Pefm

This document contains a 10-part question about concepts in production economics and financial management. It asks the student to define terms like elasticity of demand, obsolescence, double entry bookkeeping, net present value, and leverage. It also asks the student to calculate depreciation using the declining balance method, prepare manufacturing accounts from a trial balance, and explain concepts like time value of money, ratio analysis, and methods of capital budgeting.

Uploaded by

api-279049687
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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I

Reg. No.

L34 S 52
FOUR YEAR B.TECH. DEGREE EXAMINATION

- APRIL 2015.

FOURTH SEMESTER EXAMINATION


MECHANICAL ENGINEERING
PRODUCTION ECONOMICS AND FINANCIAL MANAGEMENT (PEFM)

(scHEME * 2013)

Time : 3 Hours
Note : Question No.

Max. Marks :70

I is comnulsory and::Hi;: * answered first in sequence at


Answer any FOUR from the remaining

Question No. 1 carries 10 marks and remaining questions carry 15 marks each.

1.

Answer the following

(a)
(b)
(c)
(d)
(e)
(0
(g)

Define elasticity of demand.


Three main elements of cost are
Defineobsolescence.

Define double entry book keeping.


State the underlying principle on which balance sheet is prepared.
Define time value of money.

ratio helps investors analyze how much they should


The
pay for a stock based on its currents earnings.

(h)
(i)

Define capital budgeting.

CI)

Mention types of leverages.

2. (a)

Define NPV.

Explain law of diminishing marginal utility with its assumptions and

limitations.(b)

Explain briefly the factors governing elasticity of

Q)

demand.

(8)

Turn Over

(a)
(b)

4.

Explain briefly the different elements of total

cost.

(1)

l,

20L4, your college purchased equipment at the cost of


Rs. 1,40,000. This equipment is estimated to have 5-year useful life. At
the end of the 5th Year the salvage value (residual value) will be
Rs. 20,000. College recognizes depreciation to the nearest whole month.
Calculate the depreciation expenses for 2014, 2015 and 2016 using
(8)
declining balance depreciation method.

On April

Prepare manufacturing, trading and profit and loss account for the year ended
31"t March 2014 and balance sheet as at the end of the year from the following
(15)
trial balance.
Cr. Amount
Dr. Amount
Particulars
Rs.

Rs.

Opening stock of raw materials

30,000

Opening stock of finished goods


Opening stock of work in progress

16,000

5,000
72,040

Capital
Purchases of raw materials

2,50,000
4,00,000

Sales

Purchases of finished goods

8,000

Carriage inwards

4,000
50,000

Wages

Salaries

(7 5o/o

26,000

factory)

Commission

3,000

Bad debt

2,000

Insurance

4,000

Rent, Rates and Taxes (50% factory)

12,000

Postage and Telegram

2,800

Tea and Tiffin

1,600

Travelling and convey ance (25% factory)


Carriage outwards

3,500

2,600

Machinery
Furniture

40,000

Debtors

60,000

5,000
53,500

Creditors

5,25,500

5,25,500

The closing stocks are as follows

Rs.

Raw materials
Work in progress

Finished goods

40,000
12,000

9,000

134

52

5. (a)
(b)
6. (a)

What is time value of money? Explain compounding and discounting

(8)

Explain the functions of financial

Explain the difference and significance of the following

(0
(ii)

(b)

7.

management.

(7>

(7)

Current ratios Vs Quick ratio

Activity ratios Vs Profitability ratio's


Define ratio analysis and explain briefly the usage of following financial

ratios.
(i) Liquidity ratio's (anY two)
(ii) Effrciency ratio's (any two).

(8)

What are different methods for evaluating alternative investment proposals?


(15)
Explain briefly.

,3

134

52

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