MS-04: ACCOUNTING AND FINANCE FOR MANAGER

ASSIGNMENT

Course Code : MS - 04

Course Title : Accounting and Finance for Managers

Assignment Code : MS-04/SEM - I /2011

Coverage : All Blocks

Note: Assignments Solved by www.distpub.com

1. Following are the balance sheets of a limited company as on 31^st December,

2009 and 2010.

Liabilities	2009 Rs.	2010 Rs.	Assets	2009 Rs.	2010 Rs.
Share Capital Reserves P. & L. A/c Bank Loan (Long-term) Creditors Bills Payable	54.000 13,000 8,600 25,000 28,000 8,000	74,000 15,500 8,800 - 24,000 8,500	Goodwill Buildings Plant Stock Debtors Cash Bank	3,000 50,950 35,000 25,500 22,000 150 -	2,520 48,000 43,000 18,800 16,200 180 2,100
	1,36,600	1,30,800		1,36,600	1,30,8 00

Taking into account the following additional information, you are required to prepare funds flow statement and statement of change in working capital.

a) Dividend paid was Rs. 6,000.

b) Rs. 3,600 was written off as depreciation on plant and Rs. 2,950 on buildings.

c) Profit on sale of plant was Rs. 3,000.

2. Two manufacturing companies which have the following operating details decide to merge:

Particulars	Company No. 1	Company No. 2
Capacity utilization % Sales (Rs. Lakhs) Variable Cost (Rs. Laksh) Fixed Cost (Rs. Laksh)	90 540 396 80	60 300 225 50

Assuming that the proposal is implemented calculate : (i) Break-even sales of the merged plant and the capacity utilization at that stage. (ii) Profitability of the merged plant at 80% capacity utilization. (iii) Sales turn over of the merged plant to earn a profit of Rs. 75 lakhs. (iv) When the merged plant is working at a capacity to earn a profit of Rs. 75 lakhs what percentage increase in selling price is required to sustain an increase of 5% in fixed overheads.

3. A company is considering to select a project out of the two mutually exclusive projects. The Company’s cost of capital is 10% and the net after tax cash flow of ht project are as follows.:

Year 0 1 2 3 4 5

Project X (Rs.) 2,00,000 35,000 80,000 90,000 75,000 20,000

Project Y (Rs.) 2,00,000 2,18,000 10,000 10,000 4,000 3,000

(i) Calculate the NPV and IRR of each project.

(ii) State, with reasons, which project you would recommended.

The discount factors are as follows:

Year 0 1 2 3 4 5

Discount Factor

At 10% 1 0.91 0.83 0.75 0.68 0.62

At 20% 1 0.83 0.69 0.58 0.48 0.41

4. What is capital structure? Discuss the determinants of capital structure.

5. Explain the following :

a) Zero base budgeting

b) Performance budgeting

c) Budgetary Control System

d) Marginal Costing