Answer: Environmental scanning is designed to aid the long-term planners and strategists in the organisations. Many people criticise the environmental scanning technique because of the diffused and general nature of its results. Companies use various methods for environmental Read the rest of this entry →
Answer: Service sector is one of the key contributing factors for the growth of our economy and civilisation. Though marketing literature is dominated by manufacturing and product-centric business practices, service marketing constitutes a strategic area, which has propelled growth and Read the rest of this entry →
Answer: Concepts of Working Capital
Gross working capital: Gross working capital refers to the amounts invested in various components of current
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5 Explain the capital Budgeting process and its appraisals
Solve the below given problem:
Given below are the details on the cash flows of two projects A and B. Compute payback period for A and B.
Cash flows of A and B
| Year | Project A cash flows (Rs.) | Project B cash flows (Rs.) |
| 0 | (4,00,000) | (5,00,000) |
| 1 | 2,00,000 | 1,00,000 |
| 2 | 1,75,000 | 2,00,000 |
| 3 | 25,000 | 3,00,000 |
| 4 | 2,00,000 | 4,00,000 |
| 5 | 1,50,000 | 2,00,000 |
Explanation of capital budgeting process and its appraisals.
Solution for the problem
Answer: Capital budgeting process
After the screening of proposals for potential involvement is over, the company should take up the following aspects of capital budgeting process:
4 Explain the factors affecting Capital Structure. Solve the below given problem:
Given below are two firms, A and B, which are identical in all aspects except the degree of leverage, employed by them. What is the average cost of capital of both firms?
Details of Firms A and B
| Firm A | Firm B | |
| Net operating income EBIT | Rs. 1, 00, 000 | Rs. 1, 00, 000 |
| Interest on debentures I | Nil | Rs.25,000 |
| Equity earnings E | Rs.1,00,000 | Rs.75,000 |
| Cost of equity Ke | 15% | 15% |
| Cost of debentures Kd | 10% | 10% |
| Market value of equity S = E/Ke | Rs. 6, 66, 667 | Rs.5,00,000 |
| Market value of debt B | Nil | Rs.2,50,000 |
| Total value of firm V | Rs. 6, 66, 667 | Rs,7,50,000 |
Explanation of factors affecting capital structure
Solution for the problem
Interpretation
Answer: Factors Affecting Capital Structure
Leverage: The use of sources of funds that have a fixed cost attached to them, such as preference shares, loans
Answer: Irredeemable bonds or perpetual bonds
Bonds which will never mature are known as irredeemable or perpetual bonds. Indian Companies Act restricts the issue of such bonds and therefore, these are very rarely issued by corporates these days. In case of
Answer: Doubling period
Doubling period is the period which makes the investment as “Doubled”, that is the amount invested fetches 100% return.
Answer: Wealth maximisation vs. profit maximisation
Ans: Redesigning of a layout: There are several reasons as to why a redesigning of an existing layout may be required. These are as follows:
Ans: Risk Management: Risks are those events or conditions that may occur and whose occurrence has a harmful or negative impact on a project. Risk management aims to identify the risks and then
Ans: Importance of Plant Location: A plant location cannot be changed frequently since a large capital needs to be invested to build the plant and machinery in the selected area. Therefore, before selecting a plant location, a long range forecasting is to be made to foresee the
Ans: Dimensions of quality: Quality is inherent in the product or service that is rendered to the customer. Since we are attempting to measure the same, we will look into those aspects of quality, called
Ans: Operations Strategy:
Operations strategy is defined as the set of decisions that are warranted in the operational processes in order to support the competitive strategies of the business. The objectives stated above will give the firm a competitive advanatage in the products or services that are served to the customers.
Ans: production control: Production management typically starts with aggregate planning. The data for this planning comes from the marketing department which forecasts the demand and determines the quantities of various products needed to fulfill the orders. The delivery schedules are also established. The available stocks and buffer stocks needed to meet the exigencies are also considered. In aggregate planning, all inputs that are required to meet the targets such as, machinery, Read the rest of this entry →
QUESTION4. a) Write a note on “Schedule of Changes in Working Capital”.
Answer4a. The information relating to the changes in current natured accounts between two periods of time presented in the form of a statement is what we call the schedule/statement of changes in
QUESTION3. Balance Sheets of Bhaskar and Soumya Corporation are given below :
During the year Bhaskar and Soumya introduced additional capital of Rs. 20,000 and drew Rs. 60,000. Provision for Depreciation of Machinery – Opening Balance Rs. 2,00,000 and Closing Balance Rs. 2,20,000. No depreciation was provided on other assets. The value of Building was increased by Rs. 25,000 and the same was adjusted with Capital Account.
Prepare Cash Flow Statement as per AS-3 Indirect method.
Financial Accounting
Financial accounting is the process of recording, summarizing and reporting the myriad of transactions resulting from business operations over a period of time. These transactions are
QUESTION1. From the following particulars prepare a summarized Balance Sheet of a firm as on 31. 03.2016 :
Fixed Assets to Net Worth 0.8 : 1
Current Ratio 3 : 1
Reserves included in Proprietors Fund 25 %
Acid Test Ratio 3: 2
Fixed Assets Rs. 8,00,000
Cash and Bank Balance Rs. 15,000
Current Liabilities Rs. 1,50,000
The firm has no Bank Overdraft.
QUESTION6. a. Explain the meaning of Weighted Index Numbers.
Answer6a. When all commodities are not of equal importance. We assign weight to each commodity relative to its importance and index number computed from these weights is called weighted
The one-way ANOVA compares the means between the groups you are interested in and determines whether any of those means are statistically significantly different from each other.
Probability is a branch of mathematics that deals with calculating the likelihood of a given event’s occurrence, which is expressed as a number between 1 and 0. An event with a probability of 1 can be considered a certainty: for example, the probability of a coin toss resulting in either “heads” or “tails” is 1, because there are no other options, assuming the coin lands flat. An
Answer1a.Inferential statistics use a random sample of data taken from a population to describe and make inferences about the population. Inferential statistics are valuable when it is not convenient or possible to examine each member of an entire population. For example, it is impractical to measure
The internet is sometimes called simply net. It is basically a network of computers
Aspects to be kept in mind during job interview
When the interview is for recruiting for manager, it is definitely going to be a tough task. A manager, most significantly, should have good leadership, strategic planning, business communication, and
Types of Meetings
According to Deborah Tannen, “A meeting is any focused conversation thathas a specific agenda, especially but not only if it has been set up inadvance.”1 This definition implies that meetings are not aimless discussions,but they require careful planning and revolve around a specific topic
Types of presentations and their target audience:
There are four different types of presentations you can give and their purpose is to invoke different reactions
Q2. Discuss the components of a business letter.
Answer:
Definition of Leadership
Leadership is the art of motivating a group of people to act towards achieving a common goal. This definition of leadership captures the leadership essentials of inspiration and preparation. Effective
Answer: Attitudes
Attitudes are also known as “frames of reference.” They provide the background against which facts and events are viewed. It becomes necessary to know the attitudes of members of an organisation because they have to perceive specific aspects like pay, hours of work, promotion, etc. of their work life in the
Answer.
Definition of controlling
Controlling can be defined as measuring and correcting of performance to achieve the organisational goals. According to Brech, “Controlling is a systematic exercise which is called as a process of checking
Answer: Definition and Importance of Planning
Planning can be defined as a basic management function which enables one to select the purpose of the business, and how the resources should be mustered to achieve that purpose to include using the available resources optimally to do that. Planning implies goal setting for the organisation keeping in mind the constraints, Read the rest of this entry →
Answer: Definition
From the case and the introduction, we can realise that management has been happening right through the history of man and it is all about making things smooth or shall we say efficient. It is also about achieving our goals which in modern management literature we call ‘effectiveness’. According to Harold Koontz, “
Answer:
Strategy
“The art and science of planning and marshalling resources for their most efficient and effective use. The term is derived from the Greek word for generalship or leading an army. See also tactics.”
Companies with prospects of business in other countries should be sensitive to that particular country’s culture and business environment. Every country has its own style of communication, the way they treat women in business and dressing style. Let us now discuss the business culture followed by different nations with respect to communication styles, women in business, and dress code. The table shows how the business cultures differ from one nation to another nation. Read the rest of this entry →
Difference between international Vs global business
| Strategy | International | Global |
| Location | Selected target countries and trading areas | Most global businesses operate in North America, Europe, Asia Pacific, and Latin America |
| Business | Custom strategies to fit the circumstances of each host country situation | Same basic strategy worldwide with minor country customisation where necessary |
| Product-line | Adopted to local culture and particular needs and expectations of local buyers | Mostly standardised products sold worldwide, moderate customisation depending on the regulatory framework |
| Production | Plants scattered across many host countries, each producing versions suitable for the surrounding environment | Plants located on the basis of maximum competitive advantage (in low cost countries close to major markets, geographically scattered to minimise shipping costs, or use of a few world scale plants to maximise economies of scale) |
| Source of supply of raw materials | Suppliers in host country preferred | Attractive suppliers from across the world |
| Marketing and distribution | Adapted to practices and culture of each host country | Much more worldwide coordination; minor adaptation to host country situations if required |
| Cross country connections | Efforts made to transfer ideas, technologies, competencies and | Efforts made to use almost the same technologies, competencies, and |
| capabilities that work successfully in one country to another country whenever such a transfer appears advantageous | capabilities in all country markets (to promote use of a mostly standard strategy), new successful competitive capabilities are transferred to different country markets | |
| Company organisation | Form subsidiary companies to handle operations in each host country; each subsidiary operates more or less autonomously to fit host country conditions | All major strategic decisions closely coordinated at global headquarters; a global organisational structure is used to unify the operations in each country |
Answer:-
ETOP and EFEM focus only on the opportunities and threats from the environment. But, to exploit an opportunity or to consider a threat, a company should have required strengths or competence. A company also needs to know its weaknesses in terms of competence, because weaknesses may affect its capability to take advantage of an opportunity or negotiate a threat. So, simultaneously with environmental analysis orappraisal, organizations also need to assess their internal strengths and weaknesses. This is done through SWOT analysis. Read the rest of this entry →
Answer:-
The word ‘strategy’ comes from Greek strategies, which refers to a military general and combines stratus (the army) and ago (to lead). The concept and practice of strategy and planning started in the military, and, over time, it entered business and management. The key or common objective of both business strategy and military strategy is the same, i.e., to secure competitive advantage over the rivals or opponents. We will discuss the similarity between business and military strategies in detail later.
2 How strategic planning and strategic management are interrelated to each other? Which comes first?
Answer: –
Strategic planning and strategic management are intimately related to each other. Where strategic planning ends, strategic management takes over; but, both are complementary to each other. They form vital links in an integrated chain in corporate management. Both are continuous processes. Strategic management may be more continuous, because it involves implementation and monitoring also. Read the rest of this entry →
Answer:
When a draft bill is drawn on a foreign firm, it is termed as a foreign draft or bill of exchange. It is prepared either in an international currency or Indian rupee depending on the terms of contract. Accordingly, the bill is known by the name of currency in which it is drawn. For example, the bill drawn in US dollars is known as “Dollar Bill” and when prepared in rupees it is termed as “Rupee Bill”. Read the rest of this entry →
Answer: Sales promotion
Sales promotion is one of the most important aspects of marketing. Selling is as important as producing. Every manufacturer has to sell his product in the market – domestic or international. Selling products in the international market is more difficult than selling them in the domestic market. Read the rest of this entry →
