CS {MA\N) EXAM, 2010

Sl. No. 288 C-DTN-·K-D BA

COMMERCE AND ACCOUNTA NCY

Paper-I

I
Time Allowed Three Hours I I Maximum Marks 300 I
INSTRUCTIO NS

Each question is printed both in Hindi and

in English.
AnsLUers m.ust be u;ritten in the ·medium
specified in the Admission Certifzcate issued
to you, u;hich must be stated clearly on the
cover of the answer-book zn the space
provided for the purpose. No marks u;ill be
given for the ansu;ers UJritten in a medium
other than that specified in the Admission
Certificate.
Candidates should attempt Question Nos. :1.
and 5 which are compulsory, and any three
of the remaining questions selecting at least
one question from each Section.
Assunte suitable data if considered
necessary and indicate the same clearly.
The number of marks carried by each
question zs indicated at the end of the
question.

""''" ~ : <>l:{<l:~il <f>f l%'"<ft %41"<H ~ >PR-~ it; N0<.'1 ~ 'R

"<§<fT ~I
 •

Section-A

1. Answer the following in about 150 words

each : I5x4=60
(a) What objectives prompt a company to
opt for 'buy-back' of shares? Through
what sources can such a company
execute the scheme of 'buy-back'?
Examine.
{b) How would you classify the different
items of cost for the purposes of
disclosing these items in a 'Cost-sheet'?
Explain.
(c) What relief is available to an individual
under Section 89(1) of Income-tax Act,
1961 in respect of gratuity received from
a public company after rendering
services for more than 20 years? Ho-w
shall the relief be calculated?
(d) In -what situations are business losses
allowed to be set off and carried forward
by persons other than those who
actually suffered the losses?

2. (a) (i} From the following details of a

company, you are required to
calculate 'Earning Per Share' : 15
Net profit (after tax)-Rs 2,00,000
Preference share capital
(Rs 100 each)-Rs 50,000
Equity share capital
(Rs 10 each)-Rs 1,50,000

C-DTN-K-DBA/42 2
 15x4=60

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3~'1
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m~ it '<li4B @(1c:' cfit <i'l<il'll q;r R"'liC:'l CR
Bct><fl ~? <rfr!\1UT chl f5l <{ I
(<Sf) '<:11' Iii q 'let>' i! <:11' ld cfit ~ l'J<i1 <fiT $1 CfiC: ~
~ Sl>il"' ;;{! ~ ~ 3lTtl" T-f -.:r<i'l 'fiT ~ $1 Cfi I(
qlff<t;{OI ~? ~ chlf5lt; I

(TI) 20 it 3'ffu-Cfi <l1'if O<fi il <I I tJ: liC: H ~ ~ 4N I <f.

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Bkl~tof -ij <>11"1Cfi{ ~. 1961 cfit tmT 89(1)
~ ~ Rh«l Ol!Rb <it <f<l1 ~ 34<:1~ ~? ~
'fiT 4ft'h<:1'l ~ 51Cfil( Rh<11 "11<;'11?

(<l > f<f;;r q ttf+il Rt <ii -q, m

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2. (<fi) (i) ~ ~ TfQ; ~ Cf>l'q;ft ~ aii't u <>114<i>l ·~

~ ~· 'fiT 4ft:Cf><:''H Cf>Fll ~ : 15

f.l01<:1 ~'ll4il (<t>i'h~<)-2,oo,ooo ~o

3lftmr-J~~
(51<:'ilct> 100 ~o )-50,000 lio
'Ofif>il ~ ~
(51~Cf> 10 <;o)-1,50,000 ~o

C-DTN-K-DBA/42 3 I P.T.O.
 Preference shares carry 10°/o
dividend and are cumulative and
participating to the extent of 50°/o
of profits after paying dividend on
equity shares of 25o/o and transfer
of 10°/o of net profits (after tax} to
General Reserves.
You are further informed that
last year due to overall
recessionary conditions prevailing
in the industry, the Company
suffered heavy losses, resulting
into skipping the dividend on
equity shares.

(ii) How would you deal 'With the

following items in relation to Cash
Flow Statement? State in respect
of each item (transaction} whether
it leads to influw or outflow of
cash : 15

1. Depreciation

2. Payment of interim dividend

3. Revaluation of assets

4. Issue of bonus shares

5. Transfer of certain sum of

money out of profits to General
Reserves

C-DTN-K-DBA/42 4
 a:IT'UliR ~ 1 oo/o ~ ~~ 3fu: e~<fl ~
om :;f'<t>tl :i'l>lu tR 25% 3lGl ; g if-f"RT..m
3fu: f.lClcl !f114>l ( <MhH) "4; 10% cit Iii I q 1"'1
~cit i:iai{a ;g if-f if; q~"<II<J:. 50%
<fit «\GI {f'f> ~ ~I

311q if>1 >ft< "'H<t>l<l >fi >ft "'I <fl i fif; f'lm?l ma
3<ti'l•• "il wl!l ~ ~ ol<ft <fit <:man <fit "'""'fil i6
'fii(UI <t>'"'"l;fi em
>:rRl {<lf.l<ii 3dl;fi ~ ~,
f.>Je'*> qftou<H'Cl¥>q :;f$tl :i'l<iil tR ~ ~
"Rm Tfm mt

(ii) '"'<t><fi 51 <ill{< f<lcHUI' if; «ki~'U "il 3{Tq

f.l""!Roifuta-.:Rt ~ ~ Sl<t>R "'of<l ~? S~til<t>

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qi{ou<H'CI<:<>q "'<t><!i <liT :s:io<lft< mnr t m fif;
"'i1:<1ft< : 15

1. 'i<"'<it>l«

2. :..:ial{q cll~i>11 <fi\ 31GI>l 1 fl

..
4. <ii 'l e il<H1 q;r f.l•f<l

. S. ~"114>1 "il ~ ~· f<l~l<t <:lfu <liT li!IGI">l

-mUI'<! rn >if em :..:i a {0.

C-DTN-K-DBA/42 5 I P.T.O.
 (b) From the following information given by
XYZ Limited as on 30th June, 2010,
prepare a Cost Statement showing
(i) Cost of output-Total as well as per
unit and (ii) Net Profit for the year : 30
Information :
Rs
Sales 49,000
Purchase of raw materials 15,000
Direct wages 15,000
Rent and other works cost 5,250
Carriage inward 250
Stock at the beginning
of the year :
Raw materials 2,500
Finished goods (50 tons) 3,000
Stock at the end of the year
Raw materials 2,750
Factory overheads 750
Sales promotion expenses 1,000
Office expenses 7,500
Selling expenses 2,000
Company produced 750 tons of
products. The stock of finished goods at
the end is 100 tons. It has to be valued
at works cost.

3. (a) From the following particulars, compute

total income and tax payable by Mr. A
who is disabled and is of 68 years on
31st March, 2010 for the assessment
year 2010-11 : 28
(i) Salary received from the
employer-Rs 5,80,000

C-DTN-K-DBA/42 6
 (a) xyz !Biil2s IDU, ·~ Ff; 30 ~. 2010 <fi1 <{t
~ "11'1 'h I{l it, f.lq fB f€1 i1 <fi't G 'II f.l ell <'11 v:cn <'11' Id
fill Cl (0 I (\ <ll{ chlf-i! OJ; : 30
(i} f.l•fii ("1132~) cf,t <'11'1<1~~ >1ft! $'hi~

(ii} qtf * ~ f.lCl<A ~'114il

'JII'I<t>JtJ :

49,000
~ llR"! cf,t <g(lc; • 15,000
>r<>:J~ "l"l ;;lt<l i 15,000
14;(141 3fu: 3Bi f-l'4fUI'f>l<f <'11'1<1 5,250
~lt>i ""liCl'h
Cf'f * lt Sli{Al
'h"iii! I llR"!
ROI'h :
250

2,500
~ llR"! (50 01)
Cf'f * 3lo -it
'h"iii!llffi"!
&l'h :
3,000

2,750
~<f2{l 3qftoq'1 750
Rslil Wi¢1 O!f'l' 1,000
q; I 'I f<'1 :q O!f'l' 7,500
Rslil oq:q 2,000
'f>At;:ft ;r 7 50 01 3<'11<: ''HIll I 3ffi ~ ~ llR"! <f>f
'Rf'h 100 01 t I 3tlifil 'if'~ 'I fillf.l"lfo1 i;il'ld 'R fib'! I
"fHT t I

3. (<h) f-l'""'11Bf€!d aift it '!ft A cf.t f.l"~ qtf 2010-11

~ ~ ~ 3Wr 3fu: ~ q;>; <hf qftifi<'i'l chlR!t.t I
".ft A fill'h<'1i 1 1 t af'R 31 ~. 2010 <fi1 68 qtf
<nT t: 28
(i} f.l<i'hhl it "lffil ~5,80,000 <;o

C-DTN-K-DBA/42 7 I P.T.O.
 (ii) Annual value of let out house-
Rs 30,000 •

(iii) Interest on loan to purchase

another house which is self-
occupied-Rs 20,000

(iv} He sold another house on

1.4.2009 for Rs 15 lakhs. Its fair
market value on 1.4.1981 was
Rs 2,00,000. He invested on
30.7.2009 • in the bonds of NHAI
(Cost inflation index for 2009-10
is 620)

(v) He won Rs 42,000 In racecourse

betting

(vi) He paid Rs 12,000 by cheque to

secure the health insurance of GIC
for his wife

(vii) He spent on treatment of his

mother Rs 20,000, who IS
suffering from cancer

(viii) He got agricultural income of

Rs 20,000

(ix) His m1nor son 1s disabled on

whose special education he spent
Rs 15,000

{x} He donated Rs 10,000 to Gujarat

State Chief Minister Relief Fund

C-DTN-K-DBA/42 8
 (ii) Pf>uv; <R ~ llifiH &>I Cllrqifi llf<t-
30,000 ~0

{iii) ~ 3Pi llifiH, ~ «4-CliHHl ~. ~ <S~tl<:Ol *

~ 'R '"'11"1 20,000 ~0

(iv) ~ ~ 3Pi llifil"' 1.4.2009 ~ 15 <'II@

~o -it iAT 1 .
1.4. 1981 ~ 3eifil
. <til'S!"!
"11"1!(-~ 2,00,000 "'o ·· "'T I ~
30.7.2009 ~ v:to ~o -v;o a:rr,;o * -;;ff;;s
-ij f.i<l~l Pf><tl (2009-10 * ~ <'ll'ld
(X€tfd {{__--<lifiiifi 620 ~) I

(vi) ..:wr-ft '«'ft * ~ ;;;fio a:rr,;o ~o <fiT~

41141 >rnr ~ * fu-v; ~~it 12,000 ~0
3!GT~

(vii) ~ .:wr-ftmm, ~<he( it <fl~o ~. * 1;<.'11"1 il

20,000 ~0 ~~

{viii) ae<hl 20,000 l;o cfii ~ ~ ~

fix) aa<'fil "'liillfcl•l ~ Fcliticti•l ~. f->la4>1 fuil'l

~en 'R ~ 15,000 1;o Oll<t ~

(x) ~ 10,000 l;o !.fil<ld ~ !!&"l>i:fl Utrn

~~~ful:

C-DTN-K-DBA/42 9 [ P.T.O.
 (b) In DJA Company Limited, two public
financial institutions-L ife Insurance
Corporation of India and Industrial
Development Bank of India-hold 20°/o
and 40°/o of the pald-up share capital
respectively. The Company at its Annual
General Meeting passed an ordinary
resolution appointing X as an auditor
for the year 2010-1 L Representative s of
the Industrial Development Bank of
India remained absent in the meeting. A
group of members of the Company
objects to the appointment of X as
auditor of the Company on the ground
that it is violative of the provisions of the
Companies Act, 1956.
Examine the validity of X as an auditor
of the Company and state whether
contention of the members shall be
tenable. 20

(c) Examine the taxability of capital gain

arising on each of the following
transactions · 3x4=12
(i) On the sale of self-generated
goodwill of a profession
(ii) On transfer of self-generated
tenancy rights
(iii) On transfer of own right to
manufacture
(iv) On sale of old car used for
personal purposes

C-DTN-K-DBA /42 10
 (13) · m Bl<f"JAifi f<hfl<i ~-~R<1l<l »fi<H «f\m
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40% m<:UT ~ ~ ~ I if>14oft "01 ;wr-fi Cf I fif'h
m'€IWJT ~difi it cr<f 20 10-11 ~ ~ X ciT
cl@q{t~ A~ ~ ~ ~ ~ «lt:li(OI ti<t><."l
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;m ~a'*' it ~ -m 1 <t>l4;fl ~ «<'8il <tiT ~
. ~. <t>i44l ~ cl€1Ntl~ ~ <fR 'R X <fiT A~
~. <t>i44l ~. 1956 ~ 3qiif~"''l ~
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;-.;;1qRI cg m t I

ifii4ofl ~ cl<SINtl~ ~~it X <fiT fclfil:ql"lldl <tiT

'1ft~ <filfil~ 3fu: «~a liN~ <l'lfl «<'8il <tiT 51Rtfi'lu~
' 20

(7l) A'"'lfuf&a it if 51tll<t> cl'l<!'l if >R'@ ~-~

<fiT~ <tif <R\~ <filfi!l{: 3x4=12

(i) Fchdl .-iO>!ct«l'< ~ Bf-3~1R<1 t!'IJI'i <fiT f.i:£1

'R

(iv} O>!Rii•ld 51<i'l"loil ~ ~ 51~'di :!{loft <tiT( <fiT

f.'l:£1 'R

C-DTN-K -DBA/42 11 [ P.T.O.

 4. (a) (i) You being an advisor of a company
are asked by your company to
advise on the following :
L Company desires to issue
'bonus shares' in lieu of
dividend.
2. Whether the Company can use
the balance to the credit of
'Securities Premium Account'
for the issue of 'bonus shares'?
3. Whether a reserve created for
the purposes of 'redemption of
debentures' can be used for
the issue of 'bonus shares'?
Advise the Company. 15
(ii) From the following Profit & Loss
Account of an organization for the
year ended 31st March, 2010, find
out 'Cash from operations' : 15
Profit & Loss Account
for the year ended 31st March, 2010
Rs Rs
Purchases 5,00,000 Sales 8,00,000
Wages & Salaries 85,000
Miscellaneous Expenses 61,200
Loss on Sale of Old
Computers 10,900
Depreciation 21,200
Goodwill (written off) 6,000
Transfer to General
Reserves 10,000
Net Profit 1,05,700
8,00,000 8,00,000
C-DTN-K-DBA/42 12
 4. (<fi) {i) q;.-q;ft ~ ~ lil<:'ll(<<f>R ~ il; "'lrif, 3ll4chl
q;.-q;ft .:JJtYil f.lh!RiR'slo ~ BMit; 11i•l<'il ~ :

1. q;.-q;ft ~-?!; '{<iii! "it ••i'l"'le :i't«il' <nT

f.l•iq <M"'ll ""llt:dl ~I

2. <l"n q;.-q;ft 'ail'i<a l(t .. il , <it ~ ~ ?!;

~ ·~ "'~""dl <'l€11' ~ "iOf'iT ~ ~
'fiT l;+<l41cl 'fi'.: lil<f>dl ~?

3. <!"n \:go1q;.i\ ~ lfl""l"'' ~ l'l<i'l'>Hl iii

~ f.li4o 31Rf'&ffir 'fiT 'ail"'l« ii<R' ~
q;f.\ ~ ~ """'q 1<?1 fih<ll '>IT lil<f>(ll ~
3l<!t<lr -;fflf?

q;.-q ;ft <it 3;q;ft e cll t: 41 f-it tt 1 15

{ii) 31 ~. 2010 <it lil'iHl ~~Cfl'f~ ~
~ ri•I<H ~ R""'lictfuia <'!T'l-mR ci€11 il
'51""11<:'1-il il 'l<f;<!i, 'ih."l_'l cfill)fQ. : 15
31 "'T<f, 2010 <if <IXIIH Sl'( qrf iii #n<
<"'N-l!Tf.t d&l

@6<:10 5,00,000 f.lfsml 8,00,000

"'Oil<t\ :dR mr-t 85,000
!}6=h{ ~ 61,200
~ .,.;"'%{! <1iT ~ 'R !'<lf.t 10,900
l(~•;!f&ta 21,200
wrm <~ -.sm ~ 7l'IT) 6,000
Qlt:tl(D[ ~ ~ aim:vr 10,000
f4qcl ~414il 1,05,700

8,00,000 8,00,000

C-DTN-K-DBA /42 13 I P.T.O.

 (b) (i) Examine the concept of VAT
scheme. How does VAT system
remove the cascading effect of
taxes? 15
(ii} Referring to the provisions relating
to Service Tax, examine the
validity of the following
exemptions : 15
1. Service provider whose turn-
over is Rs 6 lakhs
2. Export of services worth
Rs 50 lakhs
3. Services to UN Agencies worth
Rs 25 lakhs
4. Services provided to Mr. X
a developer of SEZ worth
Rs 20 lakhs
5. Goods and materials supplied
worth Rs 5 lakhs while
providing service

Sect:ion-B

5. Answer the follovving in about 150 words

each :
(a) "Shareholders' wealth maximisation is a
theoretically logical and operationally
feasible normative goal for guiding
tmancial decision-making, while profit
maximisation is not." Critically evaluate
this statement. 15

C-DTN-K-DBA/42 14
 (<9) (i) ·~ <i'<>Hr' <fit Y'fi<""4'il q;r ~&1"T <flf->w.l ~
S!Ufl <"fi 'fitl ~ fi) 4 H'i "SI'>1'TO{ Cfil ~ }l 'hI( ~
~%? 15

(ii} oo-cg <1 ~ 34"1.-m cnr it<ll<'11 ~ ~

f.lqfa fui d ~ "<fit ~ q;r ~&1"T
<flf<il 't : 15

1. oo Sl<mu f<il~'h' ~3Ticn: 6 <'1 1€1 ~ o m

20 50 <."11€1 ~0 ~<fit oom q;r f.l<lfa

3 0 <t_o 1Ff o tt<i'l f.?e<{j Cfii 2 5 <ill €1 ~ o ~ <fit

e<w:t
4 o 'il;;r' ~ fi!l'hlfl 'h '!fi X Cfii 'SR'U 20 <."1 H!'l
~0 ~"<fit eGJrl(
So 00 SIGH~~ ~(H 5 <."11€1 «o ~ ~
'ffi'f "tt<i BIL!!:fl <fil 'lfif f<F><lt ~

s. f.lqfafuia it ~ !'h~'h cnr <'f'TWT 150 '!lsi! it ~

<!I f'il~.t :

(<t>) "fcrd't<l f.lof<t'i ~ 111>l<:'!R ~ ~ ~ :i'l<l~lft>:i'l

if> ~ q;{ 3ifu'fid4't'fi(UJ ~;g:ifd'fi ~ <) dlfif>'fi "tt<i
Sl"''l<."lf.\ct> ~ ~ ~ 1!H<f'l<l <'i~ %, <i!Oif<F> !!'114>1
31Rl'hali1'fi(OI ::nff %1" ~ 'hi!.R cnr 'H41i"'ll"Gl'il'l<f'h
'{_<"'"! i'h'i <fil f->l 't I 15

C--DTN-K-DBA/42 15 I PoT.O.
 (b) (i) What are the decision rules of the
Discounted Cash Flow (DCF)
techniques of capital budgeting? 7

(ii) "NPV (Net Present Value)

technique of capital budgeting
decision is superior to the IRR
(Internal Rate of Return)
technique." Do you agree? 8

(c) Examine the impact of issue of stock

dividend on the market price of equity
shares of a company with a suitable
illustration. 15

(d) Evaluate the benefits of credit rating

and the process involved therein. 15

6. (a) The Summarised Balance Sheet of ABC

Ltd. as on 31st March, 2009 is as
follows with other relevant details :

Balance Sheet
as on 31st March, 2009

LW.bilities Rs Assets Rs
(in lakh) (in lakh)
Equity Capital 40·00 Fixed Assets (Net) 28-00
Reserve and Cash 2-40
Surplus 6·00 Debtors 18·60
Sundry Creditors 14-00 Inventories 11·00
60·00 60·00

C-DTN-K-DBA/42 16
 (<9) {i) ~ "1"'1<0"1 ~ <ill!l'ld 'l'"h41 51<!15 (-.fto mo
~0) d'"fi;ft"h1 ~ f.luf•H R>llJ 'f'IT ~? 7

(ii) "~ <iFil6l f.'luf<H Cf>J ~o -.:flo <flo (R<h'l

&dliH ~) d<t>;ft'"fi ~o 31Ro 3ffi:o
( <>1 i d fl:'"fi 5I Ri 4><:1 ~) d '"fi;ftq; "if .>.tg ~ I " <F!IT
3Tl'l B~lid ~? 8

(71) eT'"fi "<:11-.:rm

~ f.l•fli Cf>J "''""'"~;ft ~ ~fot>il :iJ;q{l c6't
"'I"'' I( <fillid '« 3l>n<f Cf>J, 34~ Oil~ I !JO(UI 5I ($! q;ti\
~. '<RtfdUI <fil~ll; I 15

("1) m«! F!~ ~ "<:11-TI a:fu: ;ruif :mflla SliM Cf>J

15

6. (<l>) ABC fuo Cf>J, ~ Ff; 31 lll'"'f, 2009 qil, ma:m

g<:'HY';l ~ Bklf?'-qo <P!j){l ~ m1!i ~ ~ 7lll;
<RiB I{~ :

~an( ~0 qf<eJ;qfrlqf ~0

(<mY it) • ("'""'" -if)

~[Rl~ -40·00 -w.n: qfn-11Xlfu'li (f.'loRi) 28·00
amf'..n'lt 3lR ~ 6·00 ~ 2-40
~ cl4<:::R 14·00 ~ 18·60
>m'f 11·00
60·00 60·00

C-DTN-K -DBA/42 17 I P.T.O.

 (i) Other information :
Sales Rs 52·00 lakhs
H Cost of production
of goods sold Rs 36·00 lakhs
Rs 16·00 lakhs
H Selling and
administration
expenses Rs 12·50 lakhs
Net Profit Rs 3·50 lakhs

(ii) The Current Industry Average of

the following Ratios of ABC Ltd.
is-
1. Current ratio = 2·1
2. Sales to Debtors ratio = 8·0
3. Inventory tumover = 10·2
4. Net profit to Sales = 9%
5. Sales to Total assets = 2
You are required to calculate Current
ratio, Sales to Debtors ratio, Inventory
tumover ratio, Net Profit margin and
Sales to Total ·assets of ABC Ltd. and
compare the same with the industry
average. Also give brief comments. 30
(b) "Between two extremes o! Net Income
(NI) and Net Operating Income (NOI}
approaches to Capital Structure, there
is also a middle view which is perhaps
nearer the truth." Examine this
statement in detaiL 30

C-DTN-K-DBA/42 18
 52·00 <'11€1 ~0

36·00 <'11€1 <;o

16·00 <'11€1 <;o
H Fc'! ..,... am: wt II ('l OJ

~ 12·50 <'11€1 <_io

R<l<'l !!"ll'h I 3·50 <'11@ <;o

(ii) ABC fu" o it f.l•=d~tfut<1 31::J>Giif'i q;f <l dll H

3i!il•i aflmt -;fh} ~ >w: 31::J>f!R t ,-
1. 'ffi.'l 31:!;4 I <1 = 2 ·1

2. f.'ii£1 'R 'fiufl 31:!;41<1 = 8·0

3. 1JI<'1"!_-<fi 3ll<t<f = 10·2

4. f.'ii£1 T.R R<i1<'1 !fit'!il = 9%

5. ~ 4ReAJRI<il 'R Rli£1 = 2

31 t4<hl ABC fu" 0 it 'ffi.'l 31::J>41 d, Ri£1 "EUft T.R

31:!;41ct, 'll<'1"!_-<fl 3nCfd 31:J41ct, f.l<ta <;JN !!"''~~~ 3ffi:
~ qf{eAJRI<ii T.R Ri£1 q;f 4R<t><'1'1 <t><TJI t = 3i!il•l
it ml!! 3'14>1 W"J'll
3flea 'Cfitoft t 1 !iflih ml!! 3TI'1
~ R'"'ifiil<li .qJ <!1~1.{ I 30

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C-DTN-K-DBA/42 19 I P.T.O.
 7. (a) Vijay Ltd. 1s a reputed auto parts
manufacturing company. Its equity
share is selling for Rs 50. The Company
expects its earnings per share of
Rs 7·50. The Company has a policy of
paying 60o/o of its earnings as dividends.
The company earns a return of 10°/o on
its reinvested profit.
The Company has plans for expansion,
for which it wants to issue a 10-year,
8o/o, Rs 1,000 per bond at a premium of
Rs 20. The underwriting commission is
expected to be Rs 40 per bond. The tax
rate applicable to the Company is 35°/o.
After the issue of bonds, the Company
wishes to have its debt-equity ratio
30 : 70.
You are required to work out cost of
equity, after-tax cost of bond and overall
cost of capital. 30

(b) Unique Storage Private Ltd. Co. is leader

in selling small-size storage tanks in
Central Gujarat. At present, the
Company is selling 100000 tanks at
Rs 500 each. At the current level of
production, the variable cost per tank is
Rs 400 and the total cost per tank is
Rs 450. The Company wants to enter in
the Northem Gujarat with an aggressive
marketing plan. For the purpose, it is
thinking of extending credit period from
one month to two months, so that
entering into new market will be easy in

C-DTN-K-DBA/42 20
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C-DTN-K-DBA/42 21 [ P.T.O.
 addition to attracting existing distri-
butors. If the credit period is extended,
it is estimated that sales will increase by
25 percent.
If the required rate of return (before tax}
on the investment of the Company is
25 percent, comment on the desirability
of the proposed policy. 30

8. (a) What leads to the failure of a merger or

acquisition? How should a company
ensure that the merger or acquisition is
successful? Elaborate. 30
(b) (i) If the use of financial leverage
magnifies the earnings per share
under favourable economic
conditions, why do companies not
employ very large amounts of debt
in their capital structures? 15
(il) Why is venture capital needed in a
country like India? Explain the
present position of venture capital
schemes launched by All India
Financial Institutions. 15

C-DTN-K-DBA/42 22
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***

C-DTN -K-DB A/42 23 B&-1 100

 C-DTN-K-DBA
•

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Note : English version of the Instructions is

printed on the front cover of this
question paper.
 CS (MAIN) EXAM, 2010
SI. No. 46 I C-DTN-K-DBB I
COMME RCE AND ACCOUN TANCY
Paper II

ITime Allowed : Three Hours II Ma:.:imum Marks : 3001

INSTRUCT IONS
Each question is printed both in Hindi and in
English.
Answers must 'be written in the medium
specified in the Admission Certificate issued
to you, which must be stated clearly on the
c~ver of the answer-boo k in the space
provided for the purpose. No marks will be
given for the answers written ·in a medium
. other than that specified in the Admission
Certificate.
Candidates should attempt Question Nos. 1
and 5 which are compulsory , and m>y three
of the remaining questions selecting at least
one question from each Secrion.
Assume suitable data if considered necessary
and indicate the same clearly.
All questions carry equal marks.
•
-' 14/A if: ~if CfiT &.-41 ~4/"ff{ w !n"if-'f'!if iii; N€9H '!£'
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 Section 'A'

1. Write short notes on the following m about 150

words each: 15><4=60
(a) Internal vs. External locus of control.
. .
(b) Emergence of 'Virtual Organisation'.
(c) Application of 'Johari Window' in Conflict
Resolution.

(d) Bureaucratic Dysfunctions.

2. (a) 'In order to exist, sustain artd grow, an

organisation needs to have a pyramid of a set
of goals to be achieved by the people.' Explain
with suitable examples. 30

(b) 'Organisational Politics is a way of life and it

can be constructively used by following· ethical
political behaviour for accomplishment of
organisational activities.' How far do you
agree. or disagree ? Give reasons. 30

.3. (a) Critically examine the inter-linkage of three

main aspects of the Expectancy model of
motivation. In what ways does· this model
value human dignity ? Explain.· 30

(b) 'To bring about organisational effectiveness, it

calls for Organisational Development (OD)
interventions.' Explain which type of OD
interventions can be' used and why ? 30 1

C-DTN-K-DBB 2 (Contd·.)
 --m,..
<§IU:S ' q; '

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(<!>) f.izi?~ol Cf>T 3lictf<'f> •Sl'Wl <ill@ f.isq'lf (ofl'f>B) I
(<a) ·~ 11<16'1' q;r ~I
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2. (<!>) ''ii•16'"1 il> 3lfulc'l i'f ~. <illf<lct ;;f.~- ~ aW
f<l q;fu <1 ~ i\; fuc!;, 0 f!il> 'ffif i1l' i'f il> GRT m
~ ~ il; fut:1: <WiT il; ~ m-
il; ~ fij {I Rnt q;r
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~ I' '3q<Jffi '3G:I\2(U[i 'il (%a ~
i<!T<1 'il '"I ~ I\l:O> I
cit 30
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'f>I(OI <ildl\l;C( I 30
3. (<!>) it; cfi-<l ~ qffi it; q{<:q(
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'-l<iT ? 30

C-DTN-K-DBB 3 (Contd.)
 -
4. (a) 'Centralisation and Decentralisation not m11y
exist in an organisation, but they also re- · -,
inforce each other.' Elaborate with illustra-
tions. 30
(b) In what ways Infom1ation Technology has
forced and influenced many organisations to
restructure themselves ? Explain 'with suitable
examples. 30

Section 'B' _
5. Write short notes on the following in about 150
words each : l5x4=60
(a) Considerations in designing 'pay for perform-
. ance' incentive :System.
(b) Voluntary Retirement Scheme (VRS) and
'Catch-22' situation·.
(c) Succession planning for managers.
(d) 360° Feedback evaluation.

6. · (a) Why do some organisations need more

complex and comprehensive Human
Resources planning systems than others ?
What kinds of information might an HR
planner want to collect about the extem·al
labour market ? Describe. 30
(b) 'The backbone of the entire employee
_evaluation process is the "Appraisal Interview"
.itself.' Cntically evaluate this statement. 30

C-DTN-K-DBB 4 (Contd.)

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C-DTN-K-DBB 5 (Contd.)
 . '
•

7. (a) 'Job analysis typically produces merely a job

description and the cdntext ·in which work
activities are· performed.' Critically evaluate
the statement. 30

(b) Explain key features of Industrial Grievances.

Suggest a model grievance procedure for
settlemem of such disputes. 30

8. (a) In what ways do the Industrial Relations in

public and private enterprises differ from each
other ? How can the two sectors stand to gain
from each other's experiences so as to improve
their industrial relations ? · 30

(b) 'The uneven economic development m ·the

world presents the main hinderance to the
adoption of I.L.O. conventions and recom-
rnepdations laying down 'uniform' minimum
labour standards. • Comment and also bring out
the impact of I.L.O. conventions on Indian
labour legislations. 30

C-DTN-K-DBB 6
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C-DTN-K-DBB 7

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Note :Engl ish versio n· of the Instru ctions is printe d on

the front cover of this questi on paper.

- ... __,_