VALLIAMMAI ENGINEERING COLLEGE DEPARTMENT OF CIVIL ENGINEERING CE 2451 ENGINEERING ECONOMICS AND COST ANALYSIS ______________________________________________________________________________ QUESTION BANK UNIT – I – BASIC ECONOMICS PART - A 1 2 3 4 5 6 7 8 9 10
Define economics. Classify : Wants Explain diminishing marginal utility with an example. Write any four features or characteristics of human wants How would you classify the goods? Explain any four peculiarities of land. Define managerial economics. Explain any two nature of economics. What example can you find for wealth and wants. Mention any four advantages of economics of small scale
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11 12 13 14 15 16 17 18 19 20
Can you make the distinction between positive economics and normative economics? Explain any four peculiarities of labour. Define wealth. Compare micro and macro economics. List the main areas of application of managerial economics. Write any four disadvantages of economies of small scale. Define value Explain any two nature of managerial economics. What are the four factors of production? Define utility Part - B
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1 2 3 4 5 6 7 8 9
Can you recall the concepts of (i) Micro economics (ii) Macroeconomics (iii) Normative economics (iv) Positive economics. Can you Explain the nature and scope of managerial economics. How would you apply managerial economics in solving managerial problems. What are the nature and scope of economics. Discuss the factors of production with its peculiarities. Compare economic decisions and technical decisions. How would you explain Wealth,scarcity and utility. Can you Explain the internal and external economies of large scale. i)Explain the law of diminishing marginal utility.
Ms.L.SUJATHA /AP(S.G) & V.SELVA LAKSHMI /AP(O.G)
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DEPARTMENT OF MBA
VALLIAMMAI ENGINEERING COLLEGE DEPARTMENT OF CIVIL ENGINEERING CE 2451 ENGINEERING ECONOMICS AND COST ANALYSIS ______________________________________________________________________________
10
ii)What evidence can you find for the nature and scope of engineering economics? What are the advantages and disadvantages of small scale production.
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Unit – II DEMAND AND SCHEDULE Part - A 1 2 3 4 5 6 7 8 9 i) 9 ii) 10 11 12 13 14 15 16 17 18 19 i) 19 ii) 20
1 2 3 i) 3 ii 4 i)
Define demand Can you explain law of demand Identify the factors influencing demand. What are the assumptions of law of demand? How is elasticity of demand used for forecasting? Why does the demand curve slope downwards to the right? Define elasticity of demand How would you classify the methods used to measure the elasticity of demand? How would you show your understanding of cross elasticity of demand. What ideas justify government demand. Define market demand. What is demand schedule? What is meant by law of supply. What reasons would you say for change in supply? Make the distinction between market price and normal price? List down the factors affecting elasticity of supply. Differentiate monopoly and monopolistic competition. Can you recall the Factors influencing supply How would you summarize supply curve?
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What facts would you select to show the market structure?
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What conclusions can you draw from the assumption of the law of supply? How would you draw a typical 'less elastic Demand curve'
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Part - B Discuss the factors determining demand. How would you compare normal and market prices? Can you list the different types of elasticity of demand? What facts would you select to show the demand curve slope downwards to the right? Explain the factors governing price elasticity of demand.
Ms.L.SUJATHA /AP(S.G) & V.SELVA LAKSHMI /AP(O.G)
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DEPARTMENT OF MBA
VALLIAMMAI ENGINEERING COLLEGE DEPARTMENT OF CIVIL ENGINEERING CE 2451 ENGINEERING ECONOMICS AND COST ANALYSIS ______________________________________________________________________________ 4 ii) 5 i) 5 ii) 6 7 8 i) 8 ii) 9 i) 9 ii) 10 i) 10 ii)
What inference can you make from the exceptions to law of demand? How would you measure elasticity of demand? Describe the classification of price elasticity of demand. How would you explain the elasticity of supply? Demonstrate price determination in the monopolistic competition. Write the factors affecting elasticity of supply. How would you show your understanding of market structure? Explain how supply and demand determine the equilibrium price. What happens if supply curve shifts to the left? Elaborate the features of monopoly and monopolistic competition.
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What are the assumptions and price determination in perfect competition?
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What judgment would you make about time element in the determination of value of market price and normal price?
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Unit – III - ORGANIZATION Part - A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
Can you list the types of banks? What is meant by credit instrument? What do you understand by mixed economy or public private partnership? Mention the limitations of Credit Creation? How would you classify the different forms of business organisation? Explain RBI. Define the term ‘Open Market Operation”. How would you compare CRR and SRR. What examples can you find for Foreign Banks. List the functions of Central bank. Name the state level financing institution for advancing loans to industries? Explain state enterprise? How would you describe the role of money in economic development? What is meant by monetary policy? Identify 4 examples for public sector undertaking. What is the role of financial manager in an organization? Define company. Compare partnership and t Stock Company. Define cash credit.
Ms.L.SUJATHA /AP(S.G) & V.SELVA LAKSHMI /AP(O.G)
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DEPARTMENT OF MBA
VALLIAMMAI ENGINEERING COLLEGE DEPARTMENT OF CIVIL ENGINEERING CE 2451 ENGINEERING ECONOMICS AND COST ANALYSIS ______________________________________________________________________________ 20
Can you list the main functions of a commercial bank?
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Part – B 1 2 3 4 5 6 7 8 9 10
List the features of t Stock Company? llustrate the various credit instruments? Identify the functions of the central bank. (RBI) Explain the different forms of Business organization with examples. Discuss the various functions and services offered by commercial banks in India. Evaluate the different types of banks? How would you explain the monetary policy of India? Elaborate the methods of control of Credit? i) Differentiate Proprietorship and Partnership? ii) Explain the characteristics of Public Corporations? What are the merits and demerits of Private sector and co-operative organization?
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Unit – IV FINANCING Part – A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
What do you mean by retained earnings? What is mean by debentures? What are the internal sources of funds? Can you list the sources of long term and short term finance? Discuss the objectives of fund flow statement Explain the rules for preparing the schedule of changes in working capital. What do you mean Bank O/D? What is meant by working capital? How would you construct a Trial Balance? Can you list the international funding agencies Formulate profit and loss . Explain fund flow statement. What do you understand by ECB? Explain fund from operation (FFO)? How would you prepare a balance sheet by using the different types of assets? What are the elements of Financial Management? How would you explain current assets and current liabilities
Ms.L.SUJATHA /AP(S.G) & V.SELVA LAKSHMI /AP(O.G)
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DEPARTMENT OF MBA
VALLIAMMAI ENGINEERING COLLEGE DEPARTMENT OF CIVIL ENGINEERING CE 2451 ENGINEERING ECONOMICS AND COST ANALYSIS ______________________________________________________________________________ 18 Can you explain bad debts? 19 Define Balance sheet? 20 What is meant by Fixed Capital?
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Part - B 1 Following are the data of HYZ Ltd. as on 31/3/2012, prepare final s: 2,240 Taxes and Insurance Purchases 1,26,440
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Plant and Machinery
50,000
Stock (1.4.2011)
50,000
Creditors
15,840
Loan
20,000
Wages
13,560
Motor Lorry
6,500
Power
4,600
Bad debts
784
Land and Buildings
27,680
Capital a/c
Telephone Charges
2,000
Repairs and Replacements
Salaries
5,726
Drawings
ment
7,600
Discount received
4,800
Debtors
16,000
Furniture
4,000
Rent received
1,146
Coal
Sales Cash in hand
150,000
158,800 2,400 12,600
13,436
Cash at Bank
4,000
1,020
The value of stock on 31/3/2012 was Rs.60, 000. 2 3
5
Explain in detail about external commercial borrowings. Construct the format of final s? What are the sources of short term and long term funds? Bring out the merits and limitations of each source? Formulate a typical Fund Flow Statement? And what are the uses of Fund Flow Statement?
6
How would you evaluate the financial institutions available in industry to meet the financial needs. Also outline the objectives of each of these institutions.
4
The following balances were extracted from the books of Prasad on 31st March 1994. Details Rs. Details Capital 50,000 Creditors Drawings 4,000 Bad debts
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7
Ms.L.SUJATHA /AP(S.G) & V.SELVA LAKSHMI /AP(O.G)
Rs. 5,000 1100
DEPARTMENT OF MBA
VALLIAMMAI ENGINEERING COLLEGE DEPARTMENT OF CIVIL ENGINEERING CE 2451 ENGINEERING ECONOMICS AND COST ANALYSIS ______________________________________________________________________________ General Expenses 5,000 Loan 15,760 Buildings 22,000 Sales 130,720 Machinery 18,680 Purchases 94,000 Stock 32,400 Motor Car 4,000 Power 4,480 Short Term Borrowings 1,800 Taxes & Insurance 2,630 Commission Received 2,640 Wages 14,400 Car Expenses 3,600 Debtors 12,560 Bills Payable 6,700 Bank Overdraft 6,600 Cash 160 Postage 210 Stock on 31st march 1994 was valued at Rs.47000.Outstanding wages Rs.600.Create a depreciation of 10 % on building. Prepare the financial s for the year ended on 31st March 1994. 8
Explain the different types of financing and also explain the need for financial analysis.
9
i)Explain the procedure to be followed by an organization to issue a debenture?
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ii)Explain in detail about Government budgeting and international finance corporation. 10 i) A company has reported a current profit of Rs.270000 after taking into consideration the following: Calculate Funds from operation. Particulars Loss on sale of furniture of redemption of debentures Discount on issue of debentures Depreciation on Machinery Goodwill Written off Interim Dividend paid Gain from sale of land Dividend income on investments Transfer to general reserve Preliminary expenses written off Profit on revaluation of investments 10 ii)
Explain the following: a) Trial Balance and b) Profit and loss .
Ms.L.SUJATHA /AP(S.G) & V.SELVA LAKSHMI /AP(O.G)
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(Rs) 20000 10000 20000 25000 20000 30000 40000 5000 50000 20000 13000 BTL 1
DEPARTMENT OF MBA
VALLIAMMAI ENGINEERING COLLEGE DEPARTMENT OF CIVIL ENGINEERING CE 2451 ENGINEERING ECONOMICS AND COST ANALYSIS ______________________________________________________________________________
Unit – V- COST AND BREAK EVEN ANALYSIS Part - A 1 2 3 4 5
12 13 14 15 16 17 18 19 20
Define Angle of Incidence? What is meant by marginal cost? Draw the behaviour of variable costs? State the factors influencing pricing decisions Can you identify the different types of feasibility study? If a company invests Rs.2,00,000 with Rs.40,000 as its annual earnings, what is the PBP of the company? Define explicit and implicit cost. What is meant by going rate pricing? What examples can you find for activity based costing? Compare bid pricing and pricing for a rate of return? What is the function of feasibility study? If the total cost of the firm is Rs.1,00,000 and fixed cost is Rs.40,000, what is the variable cost of the firm? Define capital budgeting. What is meant by margin of safety? How would you use Break Even Analysis? Explain any two pricing methods in practice. Define IRR What is meant by CVP analysis? Can you recall the managerial uses of break even analysis? Define NPV
1 2 3 4
Part - B How would you describe Price discrimination? How would you classify the pricing methods in practice? Explain marginal cost pricing and going rate pricing. Define Break Even Point. Draw breakeven point and explain its components?
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5
Explain the different techniques used in capital budgeting with respective advantages and disadvantages.
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6
From the following data, Calculate the PBP and NPV (at 7% discounting factor) for the two projects A &B and give your suggestions:
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6 7 8 9 10 11
Year
0
Ms.L.SUJATHA /AP(S.G) & V.SELVA LAKSHMI /AP(O.G)
1
2
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3
DEPARTMENT OF MBA
VALLIAMMAI ENGINEERING COLLEGE DEPARTMENT OF CIVIL ENGINEERING CE 2451 ENGINEERING ECONOMICS AND COST ANALYSIS ______________________________________________________________________________
7 8 9
10 7 8 9
10
Project A 1,00,000(Outflow) 45,000 60,000 Project A 2,00,000(Outflow) 85,000 70,000 How would you explain the importance of studying the short run and long run costoutput relationships? Explain the different types of Costing? i)From the following particulars calculate: a) Contribution b) P/V ratio c) Break even point in units and in rupees d) What will be the selling price per unit if the break even point is brought down to 25,000 Units? Particulars Amount Fixed Expenses 1,50,000 Variable cost per Unit 10 Selling price per Unit 15 ii)State some managerial uses and assumptions of Break Even Analysis? How would you explain Project Feasibility? How would you explain the importance of studuying the short run and long run costoutput relationships? Explain the different types of Costing? i)From the following particulars calculate: a) Contribution b) P/V ratio c) Break even point in units and in rupees d) What will be the selling price per unit if the break even point is brought down to 25,000 Units? Particulars Amount Fixed Expenses 1,50,000 Variable cost per Unit 10 Selling price per Unit 15 ii)State some managerial uses and assumptions of Break Even Analysis? How would you explain Project Feasibility?
Ms.L.SUJATHA /AP(S.G) & V.SELVA LAKSHMI /AP(O.G)
20,000 90,000 BTL 1 BTL 2 BTL 3
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DEPARTMENT OF MBA
VALLIAMMAI ENGINEERING COLLEGE DEPARTMENT OF CIVIL ENGINEERING CE 2451 ENGINEERING ECONOMICS AND COST ANALYSIS ______________________________________________________________________________
Ms.L.SUJATHA /AP(S.G) & V.SELVA LAKSHMI /AP(O.G)
DEPARTMENT OF MBA