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Friday, January 29, 2010

ECO402 (MICROECONOMICS) Assignment 2 Solution - VUsolutions

Solution:

At eq. demand =supply

i.e.1600-125p = 440+165p
this gives p = 4 in 2007
b) Quantity demanded equation will change due to decrease in demand of exports but not due to policy of govt.
eq. of quantity supplied will not be affected.
At p=5.5 q supplied=1347.5
we can’t find q demanded because we don't know that what is the shift in demand the question is not clear. I have solved this question assuming that given demand function is inclusive of exports.
Ans 2. e= p / (marginal cost - p) = 70 /50-70 =-7/2

by VUsolutions VU solutions

ECO402 (MICROECONOMICS) Assignment 2 Solution - VUsolutions

Solution:

At eq. demand =supply

i.e.1600-125p = 440+165p
this gives p = 4 in 2007
b) Quantity demanded equation will change due to decrease in demand of exports but not due to policy of govt.
eq. of quantity supplied will not be affected.
At p=5.5 q supplied=1347.5
we can’t find q demanded because we don't know that what is the shift in demand the question is not clear. I have solved this question assuming that given demand function is inclusive of exports.
Ans 2. e= p / (marginal cost - p) = 70 /50-70 =-7/2

by VUsolutions VU solutions

Business Communication solution - VUsolutions

Communication

“Any act by which one person gives to or receives from another person information about that person’s needs, desires, perceptions, knowledge, or affective states. Communication may be intentional or unintentional, it may involve conventional or unconventional signals, may take linguistic or non-linguistic forms, and may occur through spoken or other modes.”

Or in simple words;

Communication is the exchange of ideas, opinions and information through written or spoken words, symbols or actions.

Communication is a dialogue, not a monologue. In fact, communication is more concerned with a dual listening process. For communication to be effective, the message must mean the same thing to both the sender and the receiver.
Business Communication

Business Communication is any communication used to promote a product, service, or organization – with the objective of making sale.

In business communication, message is conveyed through various channels of communication including internet, print (publications), radio, television, outdoor, and word of mouth.

In business, communication is considered core among business, interpersonal skills and etiquette.

Historical Background

Thousands years ago, people use to communicate orally. Greeks use a phonetic alphabet written from left to right. After that, many books appeared on written communication principles. In a result of this, Greek started her very first library.

When communism was ruling China, communication had become the biggest challenge within the vast government as well as between government and people. 1st in China and then in Rome postal service was launched. After that paper and printing press was invented in china that made communication easier.

Hence, today’s principles of communications are founded on a mixture of ancient oral and written traditions.

Organization

The arrangements between individuals and groups in human society that structure relationships and activities (Business, Political, Religious or social).

In other words,

A group of people identified by shared interests or purpose, for example, a “Bank”.

Lifeblood of an Organization

Communication is the lifeblood of an organization. If we could somehow remove communication flows from an organization, we would not have an organization.

It is needed for:

* Exchanging information
* Exchanging options
* Making plans and proposals
* Reaching agreement
* Executing decisions
* Sending and fulfilling orders
* Conducting sales

When communication stops, organized activity ceases to exist. Individual uncoordinated activity returns in an organization. So, Communication in an organization, is as vital as blood for life.
Types of Business Communication

There are two types of business communication in an organization:

1. Internal Communication
2. External Communication

1.
Internal Communication

Communication within an organization is called “Internal Communication”.

It includes all communication within an organization. It may be informal or a formal function or department providing communication in various forms to employees.

Effective internal communication is a vital mean of addressing organizational concerns. Good communication may help to increase job satisfaction, safety, productivity, and profits and decrease grievances and turnover.

Under Internal Business Communication types there come;

a) Upward Communication
b) Downward Communication
c) Horizontal/Literal communication

a) Upward Communication

Upward communication is the flow of information from subordinates to superiors, or from employees to management. Without upward communication, management works in a vacuum, not knowing if messages have been received properly, or if other problems exist in the organization.

By definition, communication is a two-way affair. Yet for effective two-way organizational communication to occur, it must begin from the bottom.

Upward Communication is a mean for staff to:
* Exchange information
* Offer ideas
* Express enthusiasm
* Achieve job satisfaction
* Provide feedback

b) Downward Communication

Information flowing from the top of the organizational management hierarchy and telling people in the organization what is important (mission) and what is valued (policies).

Downward communication generally provides enabling information – which allows a subordinate to do something.

e.g.: Instructions on how to do a task.

Downward communication comes after upward communications have been successfully established. This type of communication is needed in an organization to:

* Transmit vital information
* Give instructions
* Encourage 2-way discussion
* Announce decisions
* Seek cooperation
* Provide motivation
* Boost morale
* Increase efficiency
* Obtain feedback

Both Downward & Upward Communications are collectively called “Vertical Communication”

c) Horizontal/Literal communication

Horizontal communication normally involves coordinating information, and allows people with the same or similar rank in an organization to cooperate or collaborate. Communication among employees at the same level is crucial for the accomplishment of work.Horizontal Communication is essential for:

* Solving problems
* Accomplishing tasks
* Improving teamwork
* Building goodwill
* Boosting efficiency

#
External Communication

Communication with people outside the company is called “external communication”. Supervisors communicate with sources outside the organization, such as vendors and customers.
It leads to better;

* Sales volume
* Public credibility
* Operational efficiency
* Company profits

It should improve

* Overall performance
* Public goodwill
* Corporate image

Ultimately, it helps to achieve

* Organizational goals
* Customer satisfaction

by VUsolutions VU solutions

Business Communication solution - VUsolutions

Communication

“Any act by which one person gives to or receives from another person information about that person’s needs, desires, perceptions, knowledge, or affective states. Communication may be intentional or unintentional, it may involve conventional or unconventional signals, may take linguistic or non-linguistic forms, and may occur through spoken or other modes.”

Or in simple words;

Communication is the exchange of ideas, opinions and information through written or spoken words, symbols or actions.

Communication is a dialogue, not a monologue. In fact, communication is more concerned with a dual listening process. For communication to be effective, the message must mean the same thing to both the sender and the receiver.
Business Communication

Business Communication is any communication used to promote a product, service, or organization – with the objective of making sale.

In business communication, message is conveyed through various channels of communication including internet, print (publications), radio, television, outdoor, and word of mouth.

In business, communication is considered core among business, interpersonal skills and etiquette.

Historical Background

Thousands years ago, people use to communicate orally. Greeks use a phonetic alphabet written from left to right. After that, many books appeared on written communication principles. In a result of this, Greek started her very first library.

When communism was ruling China, communication had become the biggest challenge within the vast government as well as between government and people. 1st in China and then in Rome postal service was launched. After that paper and printing press was invented in china that made communication easier.

Hence, today’s principles of communications are founded on a mixture of ancient oral and written traditions.

Organization

The arrangements between individuals and groups in human society that structure relationships and activities (Business, Political, Religious or social).

In other words,

A group of people identified by shared interests or purpose, for example, a “Bank”.

Lifeblood of an Organization

Communication is the lifeblood of an organization. If we could somehow remove communication flows from an organization, we would not have an organization.

It is needed for:

* Exchanging information
* Exchanging options
* Making plans and proposals
* Reaching agreement
* Executing decisions
* Sending and fulfilling orders
* Conducting sales

When communication stops, organized activity ceases to exist. Individual uncoordinated activity returns in an organization. So, Communication in an organization, is as vital as blood for life.
Types of Business Communication

There are two types of business communication in an organization:

1. Internal Communication
2. External Communication

1.
Internal Communication

Communication within an organization is called “Internal Communication”.

It includes all communication within an organization. It may be informal or a formal function or department providing communication in various forms to employees.

Effective internal communication is a vital mean of addressing organizational concerns. Good communication may help to increase job satisfaction, safety, productivity, and profits and decrease grievances and turnover.

Under Internal Business Communication types there come;

a) Upward Communication
b) Downward Communication
c) Horizontal/Literal communication

a) Upward Communication

Upward communication is the flow of information from subordinates to superiors, or from employees to management. Without upward communication, management works in a vacuum, not knowing if messages have been received properly, or if other problems exist in the organization.

By definition, communication is a two-way affair. Yet for effective two-way organizational communication to occur, it must begin from the bottom.

Upward Communication is a mean for staff to:
* Exchange information
* Offer ideas
* Express enthusiasm
* Achieve job satisfaction
* Provide feedback

b) Downward Communication

Information flowing from the top of the organizational management hierarchy and telling people in the organization what is important (mission) and what is valued (policies).

Downward communication generally provides enabling information – which allows a subordinate to do something.

e.g.: Instructions on how to do a task.

Downward communication comes after upward communications have been successfully established. This type of communication is needed in an organization to:

* Transmit vital information
* Give instructions
* Encourage 2-way discussion
* Announce decisions
* Seek cooperation
* Provide motivation
* Boost morale
* Increase efficiency
* Obtain feedback

Both Downward & Upward Communications are collectively called “Vertical Communication”

c) Horizontal/Literal communication

Horizontal communication normally involves coordinating information, and allows people with the same or similar rank in an organization to cooperate or collaborate. Communication among employees at the same level is crucial for the accomplishment of work.Horizontal Communication is essential for:

* Solving problems
* Accomplishing tasks
* Improving teamwork
* Building goodwill
* Boosting efficiency

#
External Communication

Communication with people outside the company is called “external communication”. Supervisors communicate with sources outside the organization, such as vendors and customers.
It leads to better;

* Sales volume
* Public credibility
* Operational efficiency
* Company profits

It should improve

* Overall performance
* Public goodwill
* Corporate image

Ultimately, it helps to achieve

* Organizational goals
* Customer satisfaction

by VUsolutions VU solutions

FIN621 solution - VUsolutions

1. Acid Test Ratio/Quick ratio = Current Assets – ( Inventory + Prepayments) / Current
Liabilities
= 36,279,168 – (1,667,425 + 267,422)/ 33,455,815
Acid test Ratio = 1.0345

2. Sales to working Capital = Net Sales / Working Capital

Net sales = 76,642,399
Working capital = current assets – current liabilities = 36,279,168 – 33,455,812 = 2,823,356
= 76,642,399 / 2,823,356
Sales to working Capital = 27.145 / 100 = 0.2714 %

PART 2
Solvency Ratio
1. Debt-to-Equity Ratio = Total Liabilities / Shareholder Equity

= 61,387,778 / 10,315,060
Debt-to-Equity Ratio = 5.951


2. Time Interest Earned Ratio = EBIT / interest Expense

= 4,752,301 / 2,370,674
Time Interest Earned Ratio = 2


1. Fixed Charge Coverage Ratio = EBIT + Lease payments / Interest Exp + Lease
Payment
= 4,752,301 + 1,392,776 / 1,392776 + 2,370,674
Fixed Charge Coverage Ratio = 1.63


PART 3

Profitability Ratios

1. Gross Profit Margin = Gross profit / Net Sales * 100


= 7,404,163 / 76,642,399 * 100
Gross Profit Margin= 9.66 %



2. Operating Profit Margin = Operating profit / Net sales * 100


= 2,979,911 / 76,642,399 * 100


Operating Profit Margin = 3.9 %


3. Pretax Margin = Net earnings + Income Tax / Net Sales

Net Earnings = 991,067
Income Tax = 1,390,560
Net Sales = 76,642,399

= 991,067 + 1,390,560 / 76,642,399

Pretax Margin = 0.031 * 100 = 3.1%


4. Net Profit Margin = Net Pr ofit After Tax / Revenue * 100%



= 991,067 / 76,642,399 * 100
Net Profit Margin = 1.29 %






5. Return on Equity (ROE) = NP after Tax / Shareholder Equity * 100


= 991,067 / 10,315,060 * 100
Return on Equity (ROE) = 9.6




6. Return on Assets (ROA) = Net Income / Total Assets * 100


= 991, 067 / 71,702,838 * 100
ROA = 1.382


PART 4

Activity Ratios


1. Inventory Turnover = Cost of Goods Sold / Avg. Inventory

CGS = 69,238,236
Avg. Inventory = Open stock + Closing Stock / 2

= 1,391,068 + 1,667,425 / 2
Avg. Inventory = 1,529,247

= 69,238,236 / 1,529,247

Inventory Turnover = 45.24


2. Accounts Receivable Turnover = Net Sales / Avg. Account receivable



= 76,642,399 / 18,053,051

Accounts Receivable Turnover = 4.245 Times




3. Accounts payable turnover = CGS / Avg. Account payable



= 69,238,236 / 27,809,479
Accounts payable turnover = 2.489 times




4. Average collection period = (Trade Debtors × No. of Working Days) / Net Credit Sales

Accounts Receivable = 20,045,028
No. of Working Days = 360
Net Credit Sales = 76,642,399

= 20,045,028 * 360 / 76,642,399
= 94 days


by VUsolutions VU solutions

FIN621 solution - VUsolutions

1. Acid Test Ratio/Quick ratio = Current Assets – ( Inventory + Prepayments) / Current
Liabilities
= 36,279,168 – (1,667,425 + 267,422)/ 33,455,815
Acid test Ratio = 1.0345

2. Sales to working Capital = Net Sales / Working Capital

Net sales = 76,642,399
Working capital = current assets – current liabilities = 36,279,168 – 33,455,812 = 2,823,356
= 76,642,399 / 2,823,356
Sales to working Capital = 27.145 / 100 = 0.2714 %

PART 2
Solvency Ratio
1. Debt-to-Equity Ratio = Total Liabilities / Shareholder Equity

= 61,387,778 / 10,315,060
Debt-to-Equity Ratio = 5.951


2. Time Interest Earned Ratio = EBIT / interest Expense

= 4,752,301 / 2,370,674
Time Interest Earned Ratio = 2


1. Fixed Charge Coverage Ratio = EBIT + Lease payments / Interest Exp + Lease
Payment
= 4,752,301 + 1,392,776 / 1,392776 + 2,370,674
Fixed Charge Coverage Ratio = 1.63


PART 3

Profitability Ratios

1. Gross Profit Margin = Gross profit / Net Sales * 100


= 7,404,163 / 76,642,399 * 100
Gross Profit Margin= 9.66 %



2. Operating Profit Margin = Operating profit / Net sales * 100


= 2,979,911 / 76,642,399 * 100


Operating Profit Margin = 3.9 %


3. Pretax Margin = Net earnings + Income Tax / Net Sales

Net Earnings = 991,067
Income Tax = 1,390,560
Net Sales = 76,642,399

= 991,067 + 1,390,560 / 76,642,399

Pretax Margin = 0.031 * 100 = 3.1%


4. Net Profit Margin = Net Pr ofit After Tax / Revenue * 100%



= 991,067 / 76,642,399 * 100
Net Profit Margin = 1.29 %






5. Return on Equity (ROE) = NP after Tax / Shareholder Equity * 100


= 991,067 / 10,315,060 * 100
Return on Equity (ROE) = 9.6




6. Return on Assets (ROA) = Net Income / Total Assets * 100


= 991, 067 / 71,702,838 * 100
ROA = 1.382


PART 4

Activity Ratios


1. Inventory Turnover = Cost of Goods Sold / Avg. Inventory

CGS = 69,238,236
Avg. Inventory = Open stock + Closing Stock / 2

= 1,391,068 + 1,667,425 / 2
Avg. Inventory = 1,529,247

= 69,238,236 / 1,529,247

Inventory Turnover = 45.24


2. Accounts Receivable Turnover = Net Sales / Avg. Account receivable



= 76,642,399 / 18,053,051

Accounts Receivable Turnover = 4.245 Times




3. Accounts payable turnover = CGS / Avg. Account payable



= 69,238,236 / 27,809,479
Accounts payable turnover = 2.489 times




4. Average collection period = (Trade Debtors × No. of Working Days) / Net Credit Sales

Accounts Receivable = 20,045,028
No. of Working Days = 360
Net Credit Sales = 76,642,399

= 20,045,028 * 360 / 76,642,399
= 94 days


by VUsolutions VU solutions

Thursday, January 28, 2010

Entreprenurship Online Quiz

MC08020. : .







Quiz Start Time: 10:32 PM

Time Left

70

sec(s)

Question # 1 of 20 ( Start time: 10:32:51 PM )

Total Marks: 1

Government can help in forming new venture by providing:

Select correct option:

Finance

Technology

Infrastructure

Subsidiaries

MC08020. : .







Quiz Start Time: 10:32 PM

Time Left

49

sec(s)

Question # 2 of 20 ( Start time: 10:33:48 PM )

Total Marks: 1

Which of the following has a contradictory relationship with an individual for being an entrepreneur?

Select correct option:

His birth order

Parents’ social status

Parents’ occupation

Relationship with parents

MC08020. : .







Quiz Start Time: 10:32 PM

Time Left

38

sec(s)

Question # 3 of 20 ( Start time: 10:35:17 PM )

Total Marks: 1

Which one of the following has NO liability on the part of entrepreneur business?

Select correct option:

Partners

Board of advisors

Shareholders

Board of directors

MC08020. : .







Quiz Start Time: 10:32 PM

Time Left

60

sec(s)

Question # 4 of 20 ( Start time: 10:36:17 PM )

Total Marks: 1

Members of distribution channels are excellent sources for new ideas because:

Select correct option:

They are familiar with the needs of the market

They earn a handsome profit from new business

They do not bother if entrepreneur bears a loss

They have well-developed sales force

MC08020. : .







Quiz Start Time: 10:32 PM

Time Left

28

sec(s)

Question # 5 of 20 ( Start time: 10:36:58 PM )

Total Marks: 1

What is a target market?

Select correct option:

A group of customers a venture reaches by accident

All consumers who purchase the venture's product

A specific group of potential customers toward which a venture aims its marketing plan

A chain of discount stores

MC08020. : .







Quiz Start Time: 10:32 PM

Time Left

58

sec(s)

Question # 6 of 20 ( Start time: 10:38:08 PM )

Total Marks: 1

Generally, male entrepreneurs start their first venture in the age of:

Select correct option:

Late 20s

Early 30s

Late 30s

Early 40s

MC08020. : .







Quiz Start Time: 10:32 PM

Time Left

12

sec(s)

Question # 7 of 20 ( Start time: 10:38:49 PM )

Total Marks: 1

External forces directly affect all of the following EXCEPT:

Select correct option:

Market segmentation strategies

Types of products/services offered

Management structure of organization

Choice of businesses to acquire or sell

MC08020. : .







Quiz Start Time: 10:32 PM

Time Left

19

sec(s)

Question # 8 of 20 ( Start time: 10:40:12 PM )

Total Marks: 1

Foundation companies are formed from:

Select correct option:

Fashion

Most popular business

A winding up company

Research and development



Top of Form

MC08020. : .







Quiz Start Time: 10:32 PM

Time Left

14

sec(s)

Question # 9 of 20 ( Start time: 10:41:33 PM )

Total Marks: 1

The most important characteristic of a successful business website is::

Select correct option:

Speed

Innovation

Graphics

Products

MC08020. : .







Quiz Start Time: 10:32 PM

Time Left

61

sec(s)

Question # 10 of 20 ( Start time: 10:43:02 PM )

Total Marks: 1

The entrepreneur’s_______________ depends on his perception of the opportunity.

Select correct option:

Commitment to opportunity

Commitment of resources

Control of resources

Strategic orientation

MC08020. : .







Quiz Start Time: 10:32 PM

Time Left

53

sec(s)

Question # 11 of 20 ( Start time: 10:43:42 PM )

Total Marks: 1

Which of the following contains large number of new ideas?

Select correct option:

Files of Patent office

Official Gazette

Government patent Board

All of the given option

MC08020. : .







Quiz Start Time: 10:32 PM

Time Left

30

sec(s)

Question # 12 of 20 ( Start time: 10:45:01 PM )

Total Marks: 1

Which one of the following is a method for obtaining new ideas and solutions by focusing on problems?

Select correct option:

Product inventory analysis

Gordon method

Checklist method

Scientific method

MC08020. : .







Quiz Start Time: 10:32 PM

Time Left

35

sec(s)

Question # 13 of 20 ( Start time: 10:46:13 PM )

Total Marks: 1

Which one of the Following is the way by which an entrepreneur can enter into international business?

Select correct option:

Export

Non equity arrangements

Direct foreign investment

All of the given options

MC08020. : .







Quiz Start Time: 10:32 PM

Time Left

58

sec(s)

Question # 14 of 20 ( Start time: 10:47:16 PM )

Total Marks: 1

The transitional disturbance and lack of reform has led to boom black market in:

Select correct option:

China

Hungary

Singapore

Poland

MC08020. : .







Quiz Start Time: 10:32 PM

Time Left

57

sec(s)

Question # 15 of 20 ( Start time: 10:47:54 PM )

Total Marks: 1

Why should an entrepreneur do a feasibility study?

Select correct option:

To see if there are possible barriers to success

To identify possible sources of funds

To estimate the expected sales

To explore potential customers

MC08020. : .







Quiz Start Time: 10:32 PM

Time Left

26

sec(s)

Question # 16 of 20 ( Start time: 10:48:40 PM )

Total Marks: 1

Which of the following is not a form of cash flow financing?

Select correct option:

Line of credit

Inventory loan

Character loan

Installment loan

MC08020. : .







Quiz Start Time: 10:32 PM

Time Left

25

sec(s)

Question # 17 of 20 ( Start time: 10:50:09 PM )

Total Marks: 1

The chief motivational factor for _________________ entrepreneurs to leave jobs is the frustration of not being allowed to perform at the level of which they are capable.

Select correct option:

Male

Female

Young

All of the given options

MC08020. : .







Quiz Start Time: 10:32 PM

Time Left

72

sec(s)

Question # 18 of 20 ( Start time: 10:51:25 PM )

Total Marks: 1

Which one of the following culture that has a climate and reward system that favor conservative decision making?

Select correct option:

Entrepreneurial

Intrapreneurial

Corporate

None of the given options

MC08020. : .







Quiz Start Time: 10:32 PM

Time Left

56

sec(s)

Question # 20 of 20 ( Start time: 10:52:39 PM )

Total Marks: 1

Selling goods to another country by taking care of transactions is called:

Select correct option:

Indirect exporting

Direct exporting

Importing

Management contract