ASSIGNMENT

Course Code    :  MS-04

Course Title    :  Accounting and Finance for Managers

Assignment No.  :  MS-04/TMA/SEM-I/2019

Coverage    :  All Blocks

Note  : Attempt all questions and submit this assignment on or before 30

th

April, 2019 to the coordinator

of your study centre.

1.  Why are Accounting Practices Standardised? What progress has been made regarding

Standardization of Accounting Practices in India?

2.  What do you understand by the term Working Capital? Why is it required in a business and how

do you determine the requirement of Working Capital in a Business?

3.  You are required to compute all Variances for ABC Ltd. The company is producing a single

product for which the standard cost data per unit of output is as given below:

Direct Material     20 Kg @ Rs 10 per kg

Direct Labour      12 hours at Rs 5.50 per hour

Variable Overheads     12 hours at Rs 10 per hour

Fixed Overheads  Rs. 9,00,000 per month based on a normal volume of

60,000 direct labour hours

Selling Price  Rs 600 per unit

The costs incurred and other relevant information for the month of November 2018 are as under.

Direct Material used      1,00,000 Kg at a cost of Rs. 10,50,000

Direct Wages Paid      Rs 3,10,000 for 62,000 hours worked

Overheads        Rs. 15,26,000 out of which a sum of Rs. 9,40,000 is fixed.

Actual Output        Rs. 4,800 units sold for Rs. 28,32,000.

Assume no stocks of work-in-progress or finished goods at the beginning or at the end of the

month.

4.  XYZ Ltd. is planning to invest 20,000 crore in a project which is expected to generate Cash

Flow, over the next ten years,as follows.

Project Cash Flow over the years of XYZ Ltd.

Year  Cash Flow (in

crores)

Year  Cash Flow (in crores)

0  -20,000  6  4,000

1  1,000  7  5,000

2  1,700  8  5,500

3  2,000  9  5,500

4  2,500  10  5,500

5  3,000  -  -The WACC of the project is 10%. Compute the NPV and IRR of the Project. You are supposed

to advise XYZ Ltd on the basis of your findings whether it should accept or reject the project

under consideration.

5.  Discuss  the  purpose  of  dividend  policy.  What  are  the  different  types  of  dividend  policies?

Describe the factors that affect dividend decisions