Tamil Nadu Open University (TNOU) 2009-1st Year M.Com Commerce Tamilnadu open university Management accounting and ision making - Question Paper

M.Com. DEGREE exam –
JUNE, 2009.
First Year
(AY 2003–2004 to CY 2004 batches only)
MANAGEMENT ACCOUNTING AND DECISION
MAKING
Time : three hours Maximum marks : 75
PART A — (3 ´ five = 15 marks)
ans any 3 ques..

1. describe management accounting. explain the scope
and functions of Management Accounting.

2. How is the weighted avg. cost of capital
calculated?

3. What is Budgetary Control? elaborate the objectives
of Budgetary Control?

4. discuss the nature and concept of capital Budgeting.

5. describe ‘risk’. How can risk be measured?

PART B — (4 ´ 15 = 60 marks)
ans any 4 ques..

6. X Ltd., problems 1,00,000 8% debentures of Rs. 10 every
at a premium of 10%. The costs of floatation are at 2%.
The rate of tax applicable to the company is 60%.
calculate the cost of debt capital.

7. From the subsequent 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 Proprietor’s
fund 0.75. Long term liabilities NIL.

8. A firm has a contract to supply 10,000 units of its
product during 2005. The subsequent 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. four 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.

9. Initial investment Rs. 60,000
Life of the asset four 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
compute Internal Rate of return

10. Statement of Financial Position of Ram Seth are
provided beneath :
1.1.2004
Rs.
31.12.200
4
Rs.
1.1.2004
Rs.
31.12.2004
Rs.
Accounts Cash 40,000 30,000
payable 29,000 25,000 Debtors 20,000 17,000
Capital 7,39,000 6,15,000 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 info :
(a) There were no drawings.
(b) There were no purchase nor sale of either building
or fixed assets.
Prepare cash flow statement.

11. Your company’s share is quoted in the market at Rs.
20 currently. The company pays a dividend of Re. one per
share and the investor’s market expects a growth rate of
5% per year.
(a) calculate the company’s equity cost of capital.
(b) If the anticipated growth rate is 6% p.a. compute
the indicated market price per share.

12. describe ‘‘Decision tree analysis’’. discuss the steps
you take for constructing a decision tree

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Earning:   Approval pending.