JNTU Managerial Economics And Financial Analysis Question Paper Nov 2008

JNTU Managerial Economics And Financial Analysis Question Paper Nov 2008

(Electronics & Telematics, Electronics & Computer Engineering and Instrumentation & Control Engineering)


1. (a) What do you understand by ‘demand’? Every one desires to have mobile

phone – Does this mean that the demand for mobile phones is large?

(b) Calculate price elasticity of demand

Q1 = 4000 P1 = Rs.20

Q2 = 5000 P2 = Rs.19

How do you interpret the result? [6+10]

2. Explain and illustrate the following: and also mention why do they arise

(a) The Law of constant Returns.

(b) The Law of increasing Returns. [8+8]


3. What is opportunity Cost? Give some examples of opportunity cost. How are these

costs relevant for managerial decisions? [5+5+6]


4. Explain the role of time factor in the determinations of price. Also explain price

output determination in case of perfect competition. [8+8]


5. Write a short notes on

(a) Departmental undertaking

(b) Government company

(c) Public corporation. [5+6+5]


6. What are major sources of short term finance? Evaluate. [16]


7. From the following Trial Balance of Sri Krishna and Company prepare trading and

profit and loss account for the year ended December 31, 2000 and a Balance Sheet

as on that date.



Rs.                              Rs.

Debit                           Credit

Machinery                                               3,67,600

Opening stock                                         1,16,800

Purchases and sales                               8,00,000                      9,52,000

Returns                                                    16,800                          15,200

General expenses                                    40,000

Stationery                                                  4,000

Loan from Andhra Bank                                                                2,76,800

Cash                                                        25,300

Apprentice premium                                                                        6,400

12% loan                                                                                         20,000

Bad debts                                              13,600

Debtors and Creditors                        2,56,000                               80,000

Provision for bad debts                                                                     8,000

Interest                                                      300

Sri Krishna Capital                                                                          2,82,000



(a) Purchases include Rs.8,000 being the Value of Machinery purchased in Jan 2000

(b) Provide 5% per cent per annum as interest on capital

(c) Provide 10% depreciation on machinery

(d) Value of stock on 31-12-2000 was Rs.68,000. [16]


8. From the following extract of a balance sheet of an Airlines company calculate the

debt equity ratio and interest coverage ratio. Given that the debt equity ratio is in

the range of 10:1 , how do you interpret this ratio?

50,000, 10% preference shares of Rs.100 each

2,00,000 equity shares of Rs.10 each

10% ,30,000 debentures of Rs.100 each

Net profit during the year was Rs. 10,00,000 [16]


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