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08000HS200122003

firm is greater than price and price is greater than AVC, will the firm produce
or shut down. Give reason.

The financial details of a company are as follows. Variable cost per unit is
Rs.30. Selling price per unit is Rs.50, fixed expenses are Rs.120000. Calculate
a) Break even units b) Margin of Safety considering the actual sales as 15000
units c) The selling price per unit if BEP is brought down to 5000 units.
Explain the features of Perfect Competition. To what extend Perfect
Competition differs from Monopolistic Competition.

What are the four phases of business cycle?

Describe the circular flow concept using 3 sector model.

National Income of a country is given as 3200. If annual depreciation is 350,
NFIA 15 75, NIT is 250. Then estimate GDPmp, GNPmp and NDP¥e.

Define inflation and explain its causes.
What are the measures taken by the central bank of a nation to control
inflation?
PART ட்‌

Answer any four questions, each carries 10 marks.
The initial investment of project is Rs.30000 and the cash inflows after tax for
the 4 years are Rs.10000, Rs.14000, Rs.19000 and Rs.15000. Assume a 10%
discount rate for money. Calculate Net Present Value and comment whether the
project is acceptable or not.
Give any 2 merits and demerits of NPV method.

Details of 2 project proposals are given below. Decide which project to be

selected on the basis of Pay back period if the capital cost of both the proposals

are Rs.75000.

Year ‏جح‎ 2 3 ಕೆ.
Proposal 1 15000 20000 22000 25000

Proposal 2 15000 19000 25000 20000

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