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2 Explain about the doubling period and future value. Solve the below given
problem:
Under the ABC Banks Cash Multiplier Scheme, deposits can be made for periods
ranging from 3 months to 5 years and for every quarter, interest is added to the
principal. The applicable rate of interest is 9% for deposits less than 23 months and
10% for periods more than 24 months. What will be the amount of Rs. 1000 after 2
years?
Explanation of doubling period
Solving the problem
Explanation of future value
Assignment Set -2
1 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, Rs. 1, 00,
000 000
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 = Rs. 6, 66, Rs.5,00,000
E/Ke 667
Market value of debt B Nil Rs.2,50,000
Total value of firm V Rs. 6, 66, Rs,7,50,000
667
Explanation of factors affecting capital structure
Solution for the problem
Interpretation
2 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 Project B cash flows
(Rs.) (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
Assignment Set 2
1 Explain the following concepts
a) Electronic Data Interchange (EDI)
b) Online Payment Technology
c) Mobile Commerce
2 What is DSS? How it is different from MIS? How DSS helps in Decision making?
Decision Support System
Differences between MIS and DSS
DSS in Decision making
F1 3 2 7 6 50
F2 7 5 2 3 60
F3 2 5 4 5 25
Requireme
nts 60 40 20 15 135
Concept of Trans-shipment.
Solution through North-west corner method.
Solution through Matrix minimum method.
SET-II
4 The processing time of four jobs and five machines (in hours, when passing is not
allowed) is given in following table
MACHINES
JOB A B C D E
1 8 4 8 3 8
2 7 6 7 4 4
3 9 7 9 6 5
4 10 5 9 7 7
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