9. |
(a) |
What is two-bid system of tender?
Why it is suitable for certain circumstances? |
3+2 |
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(b) |
The top management of a company is considering the problem of marketing a new product. The investment or the fixed cost, required in the project is Rs. 15,000. The three factors that are uncertain are the selling price, variable cost and the annual sales volume. The product has a life of only one year. The management has collected the following data regarding the possible levels of these three factors. The factors are independent of each other. |
10 |
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Selling Price/unit (Rs.) | Probability | Variable Cost/unit (Rs.) | Probability | Sales volume units | Probability |
14 15 16 |
0.35 0.50 0.15 |
2 3 4 |
0.30 0.50 0.20 |
3000 4000 5000 |
0.25 0.40 0.35 |
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Using the Monte Carlo Simulation, determine the expected profit from the above investment on the basis of 10 trials and using the following 3 series of ten Random numbers each.
Series 1: 18, 71, 32, 55, 31, 20, 48, 73, 75, 03.
Series 2: 81, 93, 18, 97, 21, 83, 94, 19, 90, 02.
Series 3: 67, 63, 39, 55, 29, 78, 70, 06, 78, 76. |
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10. |
(a) |
What is the significance of option clause in supply order?
What is Risk Purchase? |
2+3 |
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(b) |
This following data pertains to a project. |
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Activity | | Normal Time | | Crash Time | | Crash Cost | | Normal Cost |
| (days) | | (days) | | (Rs.) | | (Rs.) |
1-2 2-3 2-4 2-5 3-6 4-6 5-7 6-7 |
|
3 4 3 8 4 6 5 3 |
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1 3 2 7 2 4 4 1 |
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19,000 24,000 16,000 16,000 15,000 13,000 24,000 20,600 |
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15,000 18,000 14,000 15,000 13,000 12,000 20,000 17,000 |
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(i) | What is the normal cost and the duration of the projects? |
(ii) | Crash the project till it cannot be crashed further and compute the extra cost involved with each crashing. |
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2+8 |
11. |
An entrepreneur wishes to set up an engineering consultancy and training services company in India with a capital of Rs. 10 lakhs. He enters into a joint venture with an overseas company with the terms & conditions that |
15 |
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(i) | His firm can provide consultancy and training services in India for which the over seas firm would provide technical help; and |
(ii) | That 40% of the consultancy fee earned in India each month will be paid to the overseas collaborator, in the subsequent month. |
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The entrepreneur secured a bank loan of Rs. 50 lakhs in January 2003 and agrees to rapay Rs. 10 lakhs every quarter to the bank. The bank assured the firm to provide additional funds in case of a shortfall, if the loan repayment is made regularly.
The expenditure of the entrepreneur against fixed assets is as follows for the year 2003. |
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• | Buildings | : | Rs. 8 lakhs in January & Rs. 12 lakhs in February |
• | Interiors | : | Rs. 4 lakhs in January |
• | Office Equipment | : | Rs. 4 lakhs in January |
• | Computer Systems | : | Rs. 10 lakhs in February |
• | Furniture & Fixtures | : | Rs. 2 lakhs each in January & February and Rs. 4 lakhs in March |
The monthly running expenditure is as follows: |
• | Salaries & wages | : | Rs. 10 lakhs in January, 6 lakhs in February, Rs. 8 lakhs each in March & May. Rs. 2 lakhs in April and Rs. 4 lakhs in June. |
• | Advertisement | : | Rs. 12 lakhs in two equal instalments in January and April. |
• | Provision for Taxation | : | Rs. 12 lakhs payable in equal instalments in March and June |
• | Depreciation | : | Rs. 2 lakhs per month |
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The entrepreneur has an opening cash balance of Rs. 10 lakhs and would like to maintain a minimum cash balance of Rs. 10 lakhs. |
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Draw the Capital Budget, Trading (profit) forecast and projected cash flows for a period of six months from January, 2003 if the firm estimates the earnings (in Rs. lakhs) as follows: |
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i) ii) |
Consultancy Training |
Jan 10 10 |
Feb 20 10 |
Mar 20 20 |
Apr 10 16 |
May 40 16 |
June 20 20 |
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12. |
Write short notes on the following:
(i) | Ecological Analysis of projects |
(ii) | Milestone Payment Plan |
(iii) | Benchmarking of projects |
(iv) | Promoter's Contribution |
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4+4+4+3 |
__________ |