18ME51

Model Question Paper -1 with effect from 2020-21(CBCS

Scheme)
USN

Fifth Semester B.E. Degree Examination

Management and Economics
TIME: 03 Hours Max. Marks: 100

01. Answer any FIVE full questions, choosing at least ONE

Note: question from each MODULE.
02. Use of compound Interest Tables is permitted

Module – 1
Is Management an art or a science? Bring out the
(a) 10
differences between Management and Administration.
Q.1 What is planning? Discuss in detail the steps involved in
(b) 10
planning.
OR
Discuss the various levels of Management and the skills
(a) 10
needed to carry out the responsibilities at these levels.
Q.2
With a suitable block diagram discuss the hierarchy of
(b) 10
plans.
Module – 2
(a) What is span of control and what are the factors affecting 10
the span of control?
(b) What is controlling and what are the requirements of an 10
Q.3 efficient controlling system?
OR
(a) List and discuss the various principles of Organization. 10

(b) What are different theories of motivation? Explain any one 10

Q.4 in detail.

Module – 3
Q.5 (a) Explain the law of demand and supply with suitable 10
examples

A person wishes to have Rs.10,00,000 for his daughter’s 06

(b) marriage, 12 years from now. He plans to deposit a lump sum
amount which will fetch him an interest of 10% compounded
semi-annually. Determine the amount he should deposit now.
(c) How much interest is earned on a Principal amount of Rs. 04
25,000 for 7 years 10 months, at 8% compounded monthly?
OR
(a) Briefly explain the meaning of elasticity of demand and the 06
types of elasticity of demand.
Q.6 (b) A person will retire at the age of 58 years and wishes to 08
receive a lump sum for his retirement. He invests in a
retirement policy when he is 40 years old with an annual
premium of Rs.60,000 till he reaches 58 years. If the rate
of interest is 10.5% compounded annually, find out how much
lump sum money he will receive at the end of the policy.
 18ME51
(c) A person plans for higher education of his child. He needs 06
the amount at the end of 18 years. He invests Rs.80,000
at the commencement of the policy and increases his
investment by 10% every year for the next 17 years. What
will be the maturity amount he will receive if the policy
promises a return of 12% per year?
Module – 4
(a) A company needs a mini bus to commute their employees from 10
home to work and back. They have two alternatives:
Q.7 1. To rent a vehicle at Rs. 3 Lakhs per year for the
next five years.
2. To buy a second hand vehicle for Rs. 3 lakhs with an
operating and maintenance cost of Rs. 1.8 Lakhs per
year. The salvage value of the vehicle after a period
of 5 years is Rs. 85,000.
Select the best alternative based on the present worth
comparison using an interest rate of 10% compounded
annually.
(b) Find the best option to buy a CNC machine using a future 10
worth method:
Option A B
Initial Investment 20,00,000 18,00,000
Annual Maintenance 2,00,000 1,80,000
Annual savings 3,00,000 2,50,000
Salvage 2,30,000 1,60,000
Life 10 Years 10 Years
Use interest rate of 10.5% compounded annually
OR
(a) Two machine models A and B perform the same function. 10
Machine A has a low initial cost of Rs. 75,600 but a
Q.8 relatively high operating cost of Rs.1760 more than that
of machine B. It has a life of 4 years. Machine B costs
Rs.1,01,000 and an annual maintenance cost of Rs. 6000 per
year and can be kept economically operational for 8 years.
The scrap value of either machine is negligible. Which
machine is preferred using an equivalent annual cost? The
minimum attractive rate of return is 9%.
(b) A plot can be purchased for Rs.14,00,000. Company A offers 10
a loan at a nominal interest rate of 8% if a down payment
of Rs.1,00,000 is made initially. The loan is to be paid
off in 10 years. Company B offers 8 years of repayment
period for the same amount of down payment at an interest
rate of 9% compounded annually. Calculate the annual
repayment for both the alternatives.
Module – 5
(a) With a neat block diagram explain in detail the components 10
that are to be considered to decide the selling price of a
Q.9 component.
(b) A firm is producing 2000 pens per day. The direct material
10
and labor cost are Rs.1800 and Rs. 2200 respectively. The
chargeable factory overheads are Rs.2900. If selling is to
be done at 20% above the factory cost, what must be the
selling cost of each pen if the company needs to make a
profit of 22% of the selling price?
OR
(a) A CNC machine costs Rs.40, 00,000 and is assumed to serve 12
for 8 years after which its salvage value is expected to be
Q.10 Rs.3,50,000. Find:
 18ME51
i.) Depreciation fund at the end of 5th year by fixed method
and declining balance method.
ii.) Book value of the machine after the 4th and 6th year by
declining balance method.
(b) A company purchases a lathe machine for Rs.5,00,000 to 08
operate it for 5 years at an interest rate of 5%. If the
salvage value is Rs.60,000 after 5 years, determine:
i.) Sinking fund amount
ii.) Annual depreciation cost
 18ME51

Table showing the Bloom’s Taxonomy Level, Course Outcome and

Programme Outcome

Question Bloom’s Taxonomy Course Programme

Level attached Outcom Outcome
e
Q.1 (a L1 CO1
)
(b L1 CO2
) L2
Q.2 (a L1 CO3
) L2
(b L1 CO3
) L2
Q.3 (a L1 CO3
)
(b L1 CO3
)
Q.4 (a L1 CO3
) L2
(b L1 CO3
)
(c L1 CO3
) L2
Q.5 (a L3 CO4
)
(b L4 CO4
)
(c L2 CO4
)
Q.6 (a L1 CO4
) L2
(b L4 CO4
) L5
(c L4 CO4
) L5
Q.7 (a L4 CO5
)
(b L4 CO5
)
Q.8 (a L4 CO5, CO6
) L5
(b L4 CO5
) L5
Q.9 (a L5 CO5, CO6
)
(b L4 CO5,CO6
) L5
Q.10 (a L1 CO5
) L2
(b L4 CO6
) L5

Lower order thinking

Bloom’s skills
Taxonom Remembering( Understanding Applying
y knowledge):�1 Comprehension): �2 (Application):
Levels �3
 18ME51
Higher order
thinking skills
Analyzing Valuating Creating
(Analysis): �4 (Evaluation): �5 (Synthesis): �6
 18ME51
Model Question Paper -2 with effect from 2020-21(CBCS
Scheme)
USN

Fifth Semester B.E. Degree Examination

Management and Economics
TIME: 03 Hours Max. Marks: 100

03. Answer any FIVE full questions, choosing at least ONE

Note: question from each MODULE.
04. Use of compound Interest Tables is permitted

Module – 1
(a) Discuss the nature and characteristics of Management. 10
Q.1 List the various types of plans. Why is decision making
(b) 10
important in planning?
OR
Describe the evolution process of the Management thought
(a) process considering the early schools of thoughts and the 10
Q.2 modern styles of management.
What are the objectives of planning? What do you
(b) 10
understand by the term Premises of Planning?
Module – 2
(a) What is leadership? What are the various leadership 10
Q.3 styles?
(b) With a neat block diagram, explain the communication 10
process.
OR
(a) What is staffing? Describe the process of selection in 12
detail.
(b) Define MBO(Management by Objectives) and MBE(Management 04
Q.4 by Exception)
Define coordination and explain its importance for the 04
(c) success of any organization.
Module – 3
Q.5 (a) With a neat sketch, explain the problem solving process. 06
Determine the effective rate of interest for a nominal 10
(b) annual rate of 10% that is compounded: i) daily ii)
monthly iii) quarterly iv) semi-annually v) continuously
(c) Explain with suitable examples, simple rate of interest 04
and compound rate of interest
OR
(a) Explain the law of diminishing returns and its limitations 06
(b) Find the profitable investment among the two after 10 08
Q.6
years:
i.) Option A involves one time investment of Rs.1,00,000
ii.) Option B involves Rs.12,000 investment annually
Both options give 10% interest rate compounded annually.
(c) Calculate the rate of return if a person invests 06
Rs.15,000 at the end of 1st year and increases it at the
rate of 10% per year. He invests for 10 years and at
 18ME51
the end he receives a lump sum of Rs.2,50,000.

Module – 4
(a) Find the best alternative based on present worth method: 12
Alternative X Y Z
Q.7 Initial 10,00,000 11,00,000 12,50,000
Investment in
Rs
Life 7 years 7 years 7 years
Salvage value 1,20,000 2,50,000 3,00,000
in Rs
Revenue in Rs 1st years 2 1st years 2.5 1st years 3
lakhs and lakhs and lakhs and
then then then
increases by increases by decreases by
10% 5% Rs.6000 per
year
Annual Rs.35,000 for Rs.40,000 for Rs.50,000
Maintenance the 1st year the 1st year annually
in Rs and then and then
increases by increases by
8% per year. 5% per year.
(b) Choose the best alternative based on present worth 08
method:
Alternative X Y Z
Purchase 2,00,000 4,50,000 4,00,000
price in Rs
Life 4 years 8 years 8 years
Salvage value 1,20,000 90,000 85,000
in Rs
Revenue in Rs 3,00,000 2,10,000 1,95,000
Annual 50,000 35,000 30,000
Maintenance
in Rs
OR
(a) A food processing company is planning its expansion of 12
cold storage facility. Three alternative site proposals
Q.8 are being considered using MARR at 10%. Plans A & B
require an investment of Rs.36,00,000 for the land while
plan C requires Rs.44,00,000. The investment will
increase the company’s revenue by Rs.24,00,000 per year.
The company proposes that a life of 10 years be used for
analysis. Data pertaining to the project are given below:
Details Proposal A Proposal B Proposal C
Building & 60 Lakhs 70 Lakhs 50 Lakhs
Machine
Installation
Compressor 10,00,000 13,50,000 8,50,000
cost
Expected 6,50,000 4,80,000 6,50,000
energy cost
per year
 18ME51
Increase in 30,000 20,000 35,000
energy cost
for each
additional
year
Annual 2,00,000 1,50,000 5,00,000
Maintenance
Salvage value 3,50,000 4,30,000 1,80,000
of equipment
Evaluate and recommend which proposal has to be selected
based on equated annual worth analysis
(b) The following alternatives can perform the same function. 08
At an annual rate of 11%, rank the alternatives as per
the equivalent annual cost:
Alternativ First cost Life Salvage Annual
e value cost
A 6000 6 years 2000 800
B 3000 3 years 1000 1000
C 2000 3 years NIL 1200

Module – 5
(a) Estimate the weight of the component and cost of material 10
if the cost per Kg is Rs.120 for the cast iron (assume
Q.9 density of CI as 7.13gm/cm3) stepped bar shown in the
figure:

(b) The market price of a washing machine is Rs.50,000 and the

10
discount allowed to the distributor is 5% of the market
price. The selling expense of the product is 15% of the
factory cost. If the material cost, labor cost and factory
overheads are in the range of 1:3:2, what profit is made
by the factory on each washing machine if the material
cost is Rs.4,000? Other overhead costs may be neglected.
OR
(a) Briefly explain the following: 10
i.) Fixed percentage depreciation method
Q.10 ii.) Sinking fund depreciation method
iii.) Personal Income tax
iv.) Corporate income tax
(b) A VMC costs Rs.35,00,000 and is expected to serve for 8 10
years after which its salvage value is expected to be
Rs.3,00,000. Find:
i.) Book value of the machine after 4th and 6th year by
declining balance method
ii.) Depreciation at the end of 6th and 7th year by SOYD
(sum of year digits) method
iii.) Depreciation by straight line method of depreciation
 18ME51

Table showing the Bloom’s Taxonomy Level, Course Outcome and

Programme Outcome

Question Bloom’s Taxonomy Course Programme

Level attached Outcom Outcome
e
Q.1 (a L1 CO1
)
(b L1 CO2
) L2
Q.2 (a L1 CO3
) L2
(b L1 CO3
) L2
Q.3 (a L1 CO3
)
(b L1 CO3
)
Q.4 (a L1 CO3
) L2
(b L1 CO3
)
(c L1 CO3
) L2
Q.5 (a L3 CO4
)
(b L4 CO4
)
(c L2 CO4
)
Q.6 (a L1 CO4
) L2
(b L4 CO4
) L5
(c L4 CO4
) L5
Q.7 (a L4 CO5
)
(b L4 CO5
)
Q.8 (a L4 CO5, CO6
) L5
(b L4 CO5
) L5
Q.9 (a L5 CO5, CO6
)
(b L4 CO5,CO6
) L5
Q.10 (a L1 CO5
) L2
(b L4 CO6
) L5

Lower order thinking

Bloom’s skills
Taxonom Remembering( Understanding Applying
y knowledge):�1 Comprehension): �2 (Application):
Levels �3
 18ME51
Higher order
thinking skills
Analyzing Valuating Creating
(Analysis): �4 (Evaluation): �5 (Synthesis): �6