B4F008 Pages: 2
Project A Project B
Capital cost : 15,000 15,000

before depreciation
but after taxes)

b) What are the limitations of payback method? (4)

10. A company is considering the purchases of new machine .Two alternative models are
available. Earnings after taxation are expected to be as follows.
(Cash inflows Rs.)

If the total investment of model A is Rs. 80000 and model B is Rs. 70000, which
alternative company will select on the basis of ARR of two models?

11. Distinguish risk and uncertainty situations. Explain about the decision making under
uncertainty.

12. a) What is meant by demand forecasting? (2)
b) Explain

i) Trend projection method. (5)

ii) Delphi method. (3)

13. a) What are the uses and limitations of a balance sheet? (5)

b) Distinguish between money market and capital market. (5)

14. a) What is foreign direct invest? (4)

b) Distinguish between direct tax and indirect tax. (6)

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