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1. Mr. Shyam have been appointed as a Business economics faculty in a reputed B School. Students are inquisitive to know how this subject would help them in decision making to any organization. Help Mr Shayam to highlight and elaborate on student’s query. 2. Complete the hypothetical table below and explain in brief the law of variable proportions. Quantity 1 2 3 4 5 6

Total Product 10 30 48 56 56 52

Average Product

Marginal product

3.a. Large-scale production is considered economical in the sense of per unit cost. Explain the statement by describing different types of economies of scale. Give examples to substantiate your answer. 3.b. Highlight the difference between shift and the movement in the demand curve.

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1. Analyse the following transactions for Surprise Ltd. using the concept of Accounting Equation comprising of Assets, Liabilities and Equity. 1. Commenced business with cash of ₹ 5,00,000. 2. Purchased equipment for cash ₹ 2,00,000. 3. Purchased furniture worth ₹50,000 on credit from IndiMart. 4. Purchased raw materials for ₹25,000 against cash from XYZ Suppliers. 5. Deposited cash of ₹ 1,25,000 in the current account. 6. Sold goods for ₹75,000 and received a cheque against the same. 2. Cash flow statement complements the income statement and the balance sheet summarizing all cash inflows and outflow transactions in the company within the given financial year. However, there are two different methods of preparing the cash flow statement – direct and indirect. Enlist the differences between Direct and Indirect method of cash flow statement. 3. Following information is available for Companies Ace Ltd. and Pace Ltd.: (₹ in lacs) Particulars Long term Debt Equity Current assets Current liabilities Net Profit Revenue (net)

Ace Ltd. 625 2100 450 300 115 355

Pace Ltd. 700 2850 550 375 178 452

a. Compute Debt-equity ratio, current ratio for both companies.

b. If face value of equity shares of both companies ₹10 each, calculate the Earnings per share ratio for both companies, advising which company is recommended for investment.

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1. You have been appointed as IT Head of a soon to be opened bank in India by the name of “People’s bank” which will have branches all over India. People’s bank is a private sector bank. Highlight atleast 5 security threats that a bank may face in today’s times and suggest 5 innovative IT security mechanisms to ensure that such threats do not harm your bank & that your systems remain as secure as ever. 2. It is often stated that “E-governance helps in building trust between governments and citizens”. Do you agree with this statement? If yes, provide one detailed example of any EGovernance project undertaken by any municipality in any part of India. Provide features of the project & benefits. If No, then justify with appropriate reasons (minimum 10 reasons) as to why eGovernance does not facilitate trust. 3. The city of Srinagar is the largest city and the summer capital of the Union territory of Jammu and Kashmir in India. You have been invited as an external IT consultant by Government of India with a mandate to convert Srinagar into a “Smart City”. a. Which “Smart” city in the world will you choose as a benchmark to emulate some of the best practices of that city into Srinagar? Provide atleast 3 reasons with brief descriptions behind your choice of choosing that particular city as a benchmark? b. Suggest & describe atleast 2 innovative technology enabled services that you will introduce into Srinagar so that it can be called as a “Smart city”?

1. Amar Bajaj Ltd, a company dealing with PVC pipes has traditionally been a centralized company from generations run by the founders. Now as the 3rd Generation steps in to take over the reins, they feel its high time, they go decentralized as the firm has grown leaps and bounds and become a mid-sized company today from the small scale it started with. They have hired you as a consultant for the same. Can you guide them about the same by making them aware of the pros and cons of both and helping them take a decision? 2. Pri Rock, a company dealing in gems and precious stones polishing earlier only had a base in Surat. It has now expanded its wings to Mumbai too and want to also get into other avenues of Jewelry. They have hired you as a consultant to help them design their organizational structure as earlier they used to follow the traditional line structure. They would want to use the 6-box model in order to determine what structure will suit them the best. Can you guide them on the same? 3. Simon Quartz, is an age-old company dealing in mechanical wrist watches and wall clocks. They feel that over the years their employees have lost their motivation and their performance standards is dipping. a. They have hired you as a consultant. Can you guide them about how can they use Mc Cleland’s Theory of Needs to motivate their employees? b. Also, can you use ERG Theory, to help guide them to motivate their employees?

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1. The concept of reserving an Ola Scooter by paying ₹499 means that customer will be first in line to purchase it when the company announces its deliveries. The company also gives an option to cancel and get a refund anytime. Based on the statement, plan an appropriate Segmentation, Targeting for Ola Scooter considering the profile of the Indian consumer. 2. After PUBG Mobile reentered the Indian market in the form of Battlegrounds Mobile India, ByteDance may be attempting something similar with TikTok. ByteDance has applied for a new trademark having ‘TickTock’ as the wordmark with the Ministry of Commerce & Industry. Suggest a suitable promotion mix for ‘TickTock’. 3. Read the case & answer the questions based on the case: Britannia Marie Gold is facing severe competition in the markets where they were leaders. Due to entry of new players, the company has witnessed a decline in sales. The Marketing head has called for meeting along with the Brand Management team to discuss the way out to face the increasing competition. a. What Line extension strategies would you suggest to counter the competition? Justify your answer. b. Suggest an appropriate promotion mix for Britannia Marie Gold.

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1. During lockdown when human face to face interactions were reduced and social distancing was a priority lot have people have watched videos on Youtube and learnt/tried a lot of D.I.Y. things and processes like make-up tutorials, food recipes, home care etc, the core foundation of watching others and doing was given as a part of which theory, by whom and in which year. Also state the 3 core concepts of this theory. 2. Your team members need some change in behaviour, you discussed this with your friend John. John recommends Law of Effects he felt it works on humans very strongly. John couldn’t remember the theory. Could you predict which theory is John referring to, who proposed this theory. Which four methods can be used in this theory for controlling behaviour of employees? 3. Spread across 100 countries and its headquartered in India, Mahindra employs over 2,40,000 people. Tech Mahindra is one of only three Indian companies to be included in the Bloomberg 2020 Gender-Equality Index. They are constantly creating a transparent policy, valuing individual differences. For Tech Mahindra, diversity of every kind is of importance. Be it diversity of one’s nationality or someone’s age, be it about gender, also about thoughts, or their abilities. In fact their constant endeavor is building a workplace that is 'intentionally' varied and diversified in every way possible." a. What are the lessons to be learnt from Tech Mahindra Gender-Equality Index? b. What practices would you recommend other Indian corporate houses to enable change of diversity and sustain it.

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1. Evan is a portfolio manager at Finance Advisors, a wealth fund. He is planning to include real estate in his portfolio. Explain the various approaches in detail that Eva can use to value the real estate. Also, mention the approaches for the valuation of REITS. 2. Seema is working as an intern at NMIMS Fund. Recently there have been lot of news related to the increased investment in the infrastructure segment by the investors. Prepare a report on behalf of Seema enlisting the forms of the infrastructure investments along with examples for each form. Also, list the benefits of investment in infrastructure segment. 3.a. ABC Capital is a hedge fund with an initial investment capital of $250 million. In its first year, the fund earns a return of 35%. The fund charges a 2% management fee based on assets under management at the end of the year and a 20% incentive fee net of management fee and also, there is a 5% hurdle rate calculated on beginning capital for the year. In the second year, the fund value declined by 10%. For the second year, calculate the following: a. Management Fees b. Incentive Fees c. Investor’s effective return 3.b. Enlist how the brownfield investments differ from greenfield investment. Also, for a company who is planning to expand its operations in foreign country which type of investment would be riskier and why?

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1. You are helping a manufacturing firm decide whether it should invest in a new plant. The initial investment is expected to be Rs. 100 crores, and the plant is expected to generate aftertax cash flows of Rs. 8 crores for the next 20 years. An additional incremental investment of Rs. 10 crores will be needed to upgrade the plant in 10 years. If the discount rate is 10%, estimate the net present value of the project. 2. Keystone Energy Infrastructure Company currently has 2.5 million common shares of stock outstanding and the stock has a beta of 1.1. It also has $ 10 million face value of bonds that have six years remaining to maturity and 9% coupon with annual payments and are priced to yield 8%. If the company issues up to $ 5 million of new bonds, the bonds will be priced at par and have a yield of 8%; if it issues bonds beyond $ 5 million, the expected yield on the entire issue will be 8.8%. The company management has learnt that it can issue new common stock at $ 10 a share. The current risk-free rate of interest is 3% and the expected market return is 10%. The company’s marginal tax rate is 25%. If the company raises $ 20 million of new capital while maintaining the same debt-to-equity ratio, what would be its weighted average cost of capital? 3. Blue Origin Exploration Company is expected to generate $ 5,000,000 in revenues and $ 1,500,000 in operating earnings next year. Currently, the company does not use debt financing and has assets of $ 10,000,000. Suppose the company were to change its capital structure, buying back $ 4,000,000 of stock and issuing $ 4,000,000 in debt. If we assume that interest on debt is 10% and income is taxed at 25%, what is the effect of debt financing on the company’s net income and return on equity if operating earnings may vary as much as 40% from expected earning operating earnings in following circumstances? a. When the company has no debt, and b. When the company has debt to total assets = 50%.

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Call us: +919741410271 Email: smu.assignment@gmail.com Visit: - https://www.mbaassignmentsolutions.com/ Business Economics 1. Given that the USD-SGD sport rate is 1.35 Calculate: a. The 90-day forward USD-SGD exchange rate, given that the  

90-day risk free interest rate in the United States is 1.25% 90-day risk free interest rate in Singapore is 2%

b. The 180-day forward USD-SGD exchange rate, given that the  

180-day risk free interest rate in the United States is 1.25% 180-day risk free interest rate in Singapore is 2%

c. If the risk free interest rate in the US remains the same, while the interest rate in Singapore increases by 25 bps, how would the calculations in (a) and (b) change. 2. The decisions made by different agents in an economy is described by the following equations: Consumption function: C = 40 + 0.8 (Yd); Yd = disposable income Tax function: T = 20 Investment function: I = 55 – 2r Government spending function: G = 20 Exports: X = 10 Imports: M = 10 a. Find the equation for goods market equilibrium for the economy described above. b. Given that the real interest rate in the economy is 4%, calculate i. Consumption ii. Investment c. What would happen to the goods market equilibrium in the economy change, if the marginal propensity to consume decreases to 0.7 and the interest sensitivity of investment increases to 3?

3. Case: Please read the article from the link below and discuss the following based on the arguments given in the article. https://consumerist.com/2015/01/12/burger-king-brings-back-15-cent-chicken-nuggets-in price-war-with-mcdonalds/ a. What market structure exists in the market segment discussed in the article? How would you evaluate the action taken by the player(s)? b. If a new player is planning to enter this market segment, how would you advise them on product placement and pricing strategy?

1. Define the terminal value of the following portfolio: a long forward contract on an asset and a long position in a European put option on the asset with the same maturity as the forward contract and a strike price that is equal to the forward price of the asset at the time the portfolio is set up. Show that the European put option has the same value as a European call option with the same strike price and maturity. 2. A financial institution has entered into a 10-year currency swap with company Y. Under the swap terms, the financial institution receives interest at 3% per annum in Swiss francs and pays interest at 8% per annum in U.S. dollars. Interest payments are exchanged once a year. The principal amounts are 7 million dollars and 10 million francs. Suppose that company Y declares bankruptcy at the end of year 6, when the exchange rate is $0.80 per franc. What is the cost to the financial institution? Assume that, at the end of year 6, the interest rate is 3%

per annum in Swiss francs and 8% per annum in U.S. dollars for all maturities. All interest rates are quoted with annual compounding. 3. Find the forward cost of a 10-month forward contract on a stock when the stock price is $50. We assume that the risk-free interest rate (continuously compounded) is 8% per annum for all maturities. a. The stock pays no dividend till maturity. b. The stock pays dividends of $0.75 per share are expected after 3 months, 6 months, and 9 months.

1. A company's capital structure is said to be "Complex Capital Structure" when the company has issued FOUR types of securities and in such case the EPS is presented as Basic EPS and Diluted EPS. Which of the securities constitute the complex capital structure? Suppose that ABC Limited provides the below information pertaining to FY21: Basic EPS = INR 1.37 per share. EBIT = INR 12 millions. The company also has 11% convertible preference share capital of INR 25 millions (face value of INR 50 each). The company's applicable tax rate is 20%. Compute the basic and diluted EPS of the company for FY21. Also explain why the Diluted EPS will always be less than or equal to Basic EPS. 2. XYZ Ltd closes its books every year on 31-March. It reported a profit of INR 500 crores and INR 550 crores for the accounting years 2019-20 and 2020-21 respectively. The company claims that the profits of the company have increased by 10%, despite the COVID pandemic. Mr. Advik is an analyst and is keen to know if the company delivered a similar performance from the cash generation perspective by its operational activities. He collects

additional information as below: Depreciation on PPE were INR 75 Crores both the years, there was a sale of a fully written down machinery on 30-Sep-2020 and the sale proceeds included INR 25 crores (adjusted for taxes) and the company had paid interests of INR 10 crores and INR 12.5 crores in FY20 and FY21 respectively (Company's policy is to treat interest costs as financing cash flow, but makes no adjustments to tax expense due to the interest component). Taxes paid were at 25% on PBT both the years. Assume that there were no changes in working capital items. Give any two reasons why companies may have higher profits in their income statement, yet show a lesser cash generation during the same period. Compute and compare the cash flow from operations of FY20 and of FY21. 3. Pyramid Limited is a company that manufactures semi-finished components used in automobiles industry. You are provided below with the Summarized Balance Sheet and Summarized Income Statement along with the industry average. Pyramid Limited Balance Sheet (in Rs. Lacs) Particulars I. EQUITY AND LIABILITIES (1) Shareholders' Funds (a) Share Capital (b) Reserves and Surplus Total Equity (2) Non-Current Liabilities (a) Long-term Liabilities (b) Other long-term Liabilities Total Long-term Liabilities (3) Current Liabilities (a) Trade Payables Total Current Liabilities TOTAL EQUITY & LIABILITIES II. ASSETS (1) Non-current Assets (a) Fixed Assets (b) Non-current Investments Total Non-Current Assets (2) Current Assets (a) Inventories (b) Trade Receivables (c) Cash and Bank Balances Total Current Assets TOTAL ASSETS

2012

Industry Average

₹ 4,562.85 ₹ 1,261.30 ₹ 5,824.15

₹ 6,975.25 ₹ 3,990.50 ₹ 10,965.75

₹ 1,000.50 ₹ 540.25 ₹ 1,540.75

₹ 750.35 ₹ 200.55 ₹ 950.90

₹ 590.65 ₹ 590.65 ₹ 7,955.55

₹ 1,030.50 ₹ 1,030.50 ₹ 12,947.15

₹ 4,890.50 ₹ 1,390.00 ₹ 6,280.50

₹ 8,980.55 ₹ 2,600.65 ₹ 11,581.20

₹ 365.00 ₹ 740.50 ₹ 569.55 ₹ 1,675.05 ₹ 7,955.55

₹ 150.55 ₹ 900.65 ₹ 314.75 ₹ 1,365.95 ₹ 12,947.15

Pyramid Limited Income Statement (Rs. Lakhs) Particulars REVENUES Less: Direct Expenses (COGS) Gross Profit Less: Indirect Expenses EBITDA (Cash Operating Profit) Less: Depreciation & Amortisation EBIT (Operating Profit) Less: Non-Operating Expenses (Interest) EBT (Pre-tax Profit) Less: Taxes PAT (Net Profit) Additional Assumptions: Number of Outstanding Shares (Rs. 10 each) Dividends Paid Market Price of Share

2012 ₹ 12,145.28 ₹ 6,597.65 ₹ 5,547.63 ₹ 2,038.35 ₹ 3,509.29 ₹ 929.20 ₹ 2,580.09 ₹ 120.06 ₹ 2,460.03 ₹ 738.01 ₹ 1,722.02

Industry Average

₹ 456.29 ₹ 861.01 ₹ 99.61

₹ 20,994.20 ₹ 9,654.78 ₹ 11,339.42 ₹ 5,876.82 ₹ 5,462.60 ₹ 1,347.08 ₹ 4,115.52 ₹ 86.29 ₹ 4,029.23 ₹ 1,208.77 ₹ 2,820.46

₹ 697.53 ₹ 1,410.23 ₹ 134.65

You are required to: a. Comment on the financial performance/position of Pyramid Limited by computing the following ratios: (i) Return on Equity (ii) Return on Total Capital (iii) Operating Profit Ratio (iv) Net Profit Ratio (v) Price to Earnings Ratio. b. Comment on the financial performance/position of Pyramid Limited by computing the following ratios: (i) Debt to Asset Ratio (ii) Interest Coverage Ratio (iii) Current Ratio (iv) Quick Ratio (v) Dividend Payout Ratio.

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1. Olive and Smith were arguing over the difference between the CMBS and RMBS. Olive argued that the only difference in the CMBS and RMBS is in terms of the underlying loans while Smith argued that the two differs in terms of the structure and call protection measures. Provide a detailed argument on behalf of Smith. 2. One of the most common measures of estimating the changes in the bond prices due to the change in the underlying yield-to-maturity of the bond is Macaulay Duration. While it is argued that Macaulay Duration is not an appropriate way of forecasting the change in the bond prices for large change in the bond’s YTM. Prove the above statement with the help of a numerical example. Also, mention which other duration measure would be a better approximation than Macaulay Duration along the with numerical proof based upon the example taken earlier. 3.a. A 10% U.S. corporate bond is priced for settlement on July 15, 2022. The bond makes semiannual coupon payments on Feb 15 and Aug 15 of each year and matures on Aug 15, 2027. The bond uses the 30/360 day-count convention for accrued interest. Calculate the full price, the accrued interest, and the flat price per USD 100 of par value for stated annual yields-to-maturity of 12%. 3.b. Diana was having an argument with Steve that duration alone is a very good measure for estimating the changes in the bond prices due to the changes in the yield-to-maturity (YTM). While Steve argues that duration alone is not an accurate way of measuring the changes in the bond prices due to the changes in the underlying YTM of the bond. Out of both statements, which statement is correct and why. Please provide the explanation as well.