Tamil Nadu Open University (TNOU) 2009 M.Com Commerce Management accounting and ision making - Question Paper
Wk5
PG-220
M.Com. DEGREE EXAMINATION -JUNE, 2009.
MCO-4
First Year (AY 2003-2004 to CY 2004 batches only) MANAGEMENT ACCOUNTING AND DECISION MAKING
Time : 3 hours Maximum marks : 75
PART A (3 x 5 = 15 marks)
Answer any THREE questions.
1. Define management accounting. Discuss the scope and functions of Management Accounting.
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2. How is the weighted average cost of capital calculated?
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3. What is Budgetary Control? What are the objectives of Budgetary Control?
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4. Explain the nature and concept of capital Budgeting.
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5. Define risk. How can risk be measured?
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PART B (4 x 15 = 60 marks)
Answer any FOUR questions.
6. X Ltd., issues 1,00,000 8% debentures of Rs. 10 each at a premium of 10%. The costs of floatation are at 2%. The rate of tax applicable to the company is 60%. Compute the cost of debt capital.
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7. From the following information, prepare a Balance sheet. Working capital Rs. 75,000. Reserves and surplus
Rs. 1,00,000. Bank overdraft Rs. 60,000. Current Ratio
1.75. Liquid Ratio 1.15. Fixed Assets to Proprietors fund 0.75. Long term liabilities NIL.
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8. A firm has a contract to supply 10,000 units of its product during 2005. The following were budgeted expenses and revenue.
Material Rs. 15 per unit
Wages Rs. 10 per unit
Works expenses (fixed) Rs. 40,000
Works expenses (variable) Rs. 4 per unit
General expenses (all fixed) Rs. 60,000
Profit is 20% on sale price. Prepare the budget for 2005 showing the costs and profits.
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9. Initial investment Rs. 60,000 Life of the asset 4 years Estimated net annual cash flows:
1st year Rs. 15,000 2nd year Rs. 20,000 3rd year Rs. 30,000 4th year Rs. 20,000 Calculate Internal Rate of return.
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10. Statement of Financial Position of Ram Seth are given below :
|
1.1.2004 |
31.12.200 |
1.1.2004 |
31.12.2004 | ||
|
Rs. |
4 |
Rs. |
Rs. | ||
|
Rs. | |||||
|
Accounts |
Cash |
40,000 |
30,000 | ||
|
payable |
29,000 |
25,000 |
Debtors |
20,000 |
17,000 |
|
Capital |
7,39,000 |
0 0 ,0 5, ,1 6, |
Stock |
8,000 |
13,000 |
|
Buildings |
1,00,000 |
80,000 | |||
|
Fixed Assets |
6,00,000 |
5,00,000 | |||
|
7,68,000 |
6,40,000 |
7,68,000 |
6,40,000 |
Additional Information :
(a) There were no drawings.
(b) There were no purchase nor sale of either building or fixed assets.
Prepare cash flow statement.
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1.1.2004 31.12.2004
1.1.2004 31.12.2004
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40.000 30,000
20.000 17,000 8,000 13,000
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11. Your companys share is quoted in the market at Rs. 20 currently. The company pays a dividend of Re. 1 per share and the investors market expects a growth rate of 5% per year.
(a) Compute the companys equity cost of capital.
(b) If the anticipated growth rate is 6% p.a. Calculate the indicated market price per share.
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12. Define Decision tree analysis. Explain the steps you take for constructing a decision tree.
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7 PG-220
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Attachment: |
| Earning: Approval pending. |
