JNTU
JNTU B.Tech II BUSINESS ECONOMIC AND FINANCIAL ANALYSIS Previous Question Paper (April/May-2023 - R16)
Answer all questions in Part A. Answer any one question from each unit in Part B.
Part A
What is inflation? Distinguish between demand-pull and cost-push inflation.
Answer
Inflation is a sustained increase in the general price level of goods and services in an economy over time, leading to a decrease in purchasing power. Demand-pull inflation occurs when aggregate demand exceeds aggregate supply, often described as 'too much money chasing too few goods.' Cost-push inflation occurs when production costs, such as wages or raw material prices, rise, forcing producers to increase prices to maintain profit margins.
Discuss the merits and demerits of sole proprietorship.
Answer
The merits of sole proprietorship include ease of formation, full control over business operations, direct motivation through profit retention, and maintenance of business secrecy. The demerits include unlimited liability, limited financial resources, limited managerial expertise, and lack of continuity if the owner is incapacitated or deceased.
Differentiate between movement along a demand curve and shift in the demand curve.
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Explain, briefly, the survey method of demand forecasting.
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Define the following: i) Production function ii) Isoquant.
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Explain the ways by which P/V ratio can be improved.
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What is accounting period concept? What is its significance?
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What are the limitations of Financial Statements? Explain them briefly.
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Distinguish between fund flow analysis and cash flow analysis.
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Explain the merits of ratio analysis as a tool for interpretation of financial statements.
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Part B
What are the major sources of funding for a company? Discuss the advantages and disadvantages in each case.
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What are business cycles? What are their various phases?
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Discuss the effects of business cycles and the measures to be initiated at the firm level and government level to control business cycles.
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The demand function for a firm is estimated as: Q=55-0.5 P (where P=Price and Q=Rate of output) and the total cost function
a) The total revenue function of the firm.
b) The marginal revenue and marginal cost functions and find the rate of output for which marginal revenue equals marginal cost.
c) An equation for profit and the level of output that maximizes total profit.
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The price of a commodity X falls from Rs.5 per kg to Rs.4 per kg and quantity demanded by consumer A increases from 4kg to 6 kg. Comment on the nature of demand for commodity X in this case.
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What would you say about the price-elasticity of commodity X, if the quantity demanded remains unchanged?
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Discuss the smoothing techniques of demand forecasting.
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Distinguish between fixed and variable costs.
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Discuss the characteristics of long run costs.
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On the basis of the following cost function:
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What are the features of monopolistic competition.
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Explain the differences between monopolistic competition and perfect competition.
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Record the following transactions in the Journal of Hyderabad furniture mart.
| 2023 January 1 | Started business with cash Rs.10,000. |
| January 2 | Deposited into bank Rs.9,000. |
| January 3 | Purchased machinery for Rs. 5,000 from Jatin and gave him a cheque for the amount. |
| January 15 | Paid installation charges of machinery Rs.100. |
| January 20 | Purchased timber from Navin of the list price of Rs.2,000. He allowed 10% Trade Discount. |
| January 23 | Furniture costing Rs.500 was used in furnishing the office. |
| January 25 | Sold furniture to Naresh of the list price pf Rs. 1,000 and allowed him 5% Trade Discount. |
| January 28 | Received a cheque from Naresh for Rs.930 in full settlement and sent the cheque to the bank. |
| January 29 | Sent to Navin in full settlement a cheque for Rs.1,750. |
| January 31 | Paid wages Rs.250 and rent Rs.200. |
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Prepare Trading and Profit & Loss Account and Balance sheet for Mr Sivaram as on 31st March, 2022 considering given Trial Balance and adjustments: a) Closing stock Rs.10,000 b) Wages outstanding Rs.500 c) Interest received in advance Rs.150.
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Calculate: i) Gross Profit ratio ii) Debt Equity ratio iii) Working Capital turnover ratio based on given financial data.
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Calculate Interest coverage ratio from the provided operational data.
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Classify the given list of transactions into cash flows from operating, investing, and financing activities.
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Is depreciation a source of funds? Explain.
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