accounting & economics for business 7 november ii
TRANSCRIPT
![Page 1: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/1.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
ECONOMICS FOR BUSINESS
AFTERSCHO☺OL – DEVELOPING CHANGE MAKERS
CENTRE FOR SOCIAL ENTREPRENEURSHIP PGPSE PROGRAMME –
World’ Most Comprehensive programme in social entrepreneurship & spiritual entrepreneurship
OPEN FOR ALL FREE FOR ALL
![Page 2: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/2.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
ACCOUNTING ECONOMICS FOR BUSINESS
Dr. T.K. Jain.
AFTERSCHO☺OLCentre for social entrepreneurship
Bikaner M: [email protected]
www.afterschool.tk, www.afterschoool.tk
![Page 3: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/3.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
SOLVE IT
• A draws a bill on B for Rs 30,000 for mutual accommodation. A discounted that bill
• For Rs.28,000 from bank and remitted Rs.14,000 to B. On due date A will send to B
• (a) Rs. 14,000• (b) Rs,14,500• (C) Rs.15,000• (d) Rs.15,500
![Page 4: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/4.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Solution
• The bill gave them 28000 out of which both of them will share equally. Both of them had to get 14000 each – and they have got it. The discount was Rs. 2000 and both have shared it equally. Thus on due date the payment of Rs. 30000 will be made by B. He already has 14000 and he will further get 15000 from A and he will add 1000 from his share. Answer.
![Page 5: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/5.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Solve it • Sure Ltd. issued 5,000, 15% Debentures of
Rs.100 each at a premium of Rs 10 These debentures were to be redeemed at a premium of Rs.4 each after 5 years amount to be credited to the debenture premium account will be
• (a) Rs.25,000• (b) Rs.50,000• (C) Rs:40,000• (d) Rs.60,000• Solution : 5000 * 10 = 50000
![Page 6: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/6.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Solve it • Mr. Big who was the holder of 200 equity shares of
Rs.100 each on which Rs.75 per share has been called up could not pay his dues on allotment and first call each at Rs.25 per share. The Directors forfeited the above shares and reissued 150 of such shares to Mr. Small at Rs.65 per share paid-up as Rs.75 per share. The amount to be transferred to Capital Reserve account will be
• (a) Rs.1,500.• (b) Rs. 2,250.• (c) Rs. 5,000.• (d) Nil.
![Page 7: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/7.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Solution
• Amount received = 25*200 = 5000• Discount allowed = 10 * 150 = 1500• Remaining amount• 15*150 = 2250 • Answer.
![Page 8: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/8.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
The Board of Directors of a company decides to issue minimum
number of equityshares of Rs. 10 each at 10%
discount to redeem Rs.5,00,000 preference shares.Maximum
amount of divisible profit available for redemption is Rs. 3 lakhs. The number of shares to be issued by
the company will be ?
![Page 9: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/9.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Solution
• 5 – 3 = 2 lakhs to be collected• Total shares to be issued : • 2 lakhs / (Rs. 10 – 1) • =22222 shares to be issued at a discount
of 10%. • Answer.
![Page 10: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/10.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
What is an indifference curve?
• Suppose I can buy two goods from some money and get equal satisfaction – there is a point where I am indifferent between them – (purchasing any of these will give equal satisfaction) - A curve with collection of locus of all such points is called indifference curve. This curve can be plotted in production function also (various combination of capital and labour that give you equal production).
![Page 11: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/11.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
What is break even point?
• The point where there is no profit no loss is called break even point
![Page 12: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/12.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
P of Faridabad sent out goods costing Rs. 45000 to Goti of
Bikaner at cost + 33%,1/10th of goods were lost In transit. 2/3rd of
the goods received are sold at 20% above price. The amount of
sale value wilt be;• Cost of goods sold = 45000*9/10*2/3• =27000. Print price = 27000+1/3 = 36000• 20% above print = 36000*1.2=43200(ans).
![Page 13: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/13.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Debit balance as per Cash Book of ABC Enterprises as on 31.3.2006 is Rs. 1,500.
Cheques deposited but not cleared amounts to Rs.100 and Cheqes issued but not presented of Rs.50. The bank gave interest amounting
Rs.50 and collected dividend Rs. 50 on behalf of ABC Enterprises. Balance as per pass book
should be
![Page 14: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/14.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Solution
• 1500 -100 +50 +50 +50• =1550 answer.
![Page 15: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/15.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Solve it
• A, B and C were partners in firm sharing profits and losses in th ratio of 2:2:1 respectively with the capital balance of Rs. 50,000 for A and B, for C Rs. 25,000; C declared to retire from the firm and balance in reserve on the date was Rs. 15,000. If goodwill of the firm was valued as Rs. 30,000 and profit on revaluation was Rs. 7,050 then what amount Will be transferred to the loan account of C?
![Page 16: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/16.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Share of C
• Capital 25000• Goodwill 30000*1/5 = 6000• Reserve = 15000*1/5 = 3000• Revaluation profit = 7050*1/5 = 1410• Add these = 35410 will be transferred to
C’s loan account.
![Page 17: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/17.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
In the previous question question, what will A get if he retires?
• Capital = 50000• Goodwill 30000*2/5 = 12000• Reserve = 15000*2/5 = 6000• Revaluation profit = 7050*2/5 = 2820• Add these = 70820 will be transferred to
A’s loan account.
![Page 18: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/18.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
The total cost of goods available for sale with a company during the
current year is Rs.12,00,000 and the totai sales during the period are
Rs.13,00,000. if the gross profitmargin of the company is 33 % on cost, the closing inventory during
the current year
![Page 19: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/19.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Solution
• Total sales = 13 lakhs• Cost of this sale = 13 lakh * 100/133• =975000• Thus closing stock is 1200000-975000• =225000 answer.
![Page 20: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/20.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Consider the following data pertaining to Goti Ltd. for the month of March 2005:
ParticularsAs on March 01, 2005 (Rs.) As Stock 1,80,000 & on March 31, 2005 (Rs.)
90,000The company made purchases amounting Rs. 3,30,000 on credit. During the month of March 2005, the company paid a sum of Rs.3,50,000
to the suppliers. The goods are sold at 25% above the cost. The sales for the month of
March 2005 were
![Page 21: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/21.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Solution – stock account
• Opening stock 180000
• Purchase 330000
• Closing stock 90000• Goods used in
manufacture = • 420000
![Page 22: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/22.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Solution
• Sale = cost of goods sold + Gross profit• 420000 + 25%• =525000• Thus sale was Rs. 525000
![Page 23: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/23.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Bhuwanesh Audi Ltd. dealer in second-hand cars has the following five vehicles of different
models [ in their stock at the end of the financial year 2004-2005: what is stock?
• Cost : • Fiat 90,000• Ambassador1,15,000• Maruti
Esteem2,75,000• Maruti 800
1,00,000• Zen 2,10,000
• The net realisable value were :
• Fiat 95,000• Ambassador 1,55,000• Maruti
Esteem2,65,000• Maruti 800
1,25,000• Zen 2,00,000
![Page 24: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/24.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Solution
• We shall take lower of cost & realisable value to compute the cost:
• Fiat 90,000• Ambassador1,15,000• Maruti Esteem2,65,000• Maruti 800 =1,00,000• Zen 2,00,000• Total stock = 770000 answer.
![Page 25: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/25.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Solve it
• On May 01,2003. Goti Ltd. Issued 7% 40 lakh convertible debentures of Its. 100 each at a premium of 20’ Interest is payable on September30 and March 31. esers sear. The interest runs from the date of issue, the amt. of interest expenditure debited to profit and loss Account for the year ended 2004 will be:
![Page 26: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/26.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Solution
• Interest will be charged for 11 months. • 40,00,000 *11/12* 7/100• =256666 answer.
![Page 27: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/27.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Study the production possibility curve below. X axis is for consumer goods, capital goods is denoted by
Y axis.
![Page 28: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/28.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Which points in PPC represent equal production?
• A,B,C,D
![Page 29: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/29.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Which points in PPC represent highest production?
• W
![Page 30: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/30.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Which points in PPC represent lowest production?
• U
![Page 31: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/31.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Which is the equilibrium point?
![Page 32: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/32.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Solution
• Q == because this is the point, where highest indifference curve touches the budget line.
![Page 33: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/33.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
In the graph,which indifference curve shows least satisfaction?
![Page 34: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/34.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Solution
• IC 1
![Page 35: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/35.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
If a consumer’s income increases, which ICs will he touch?
![Page 36: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/36.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Solution
• The consumer will shift from IC3 to IC4 and then to IC 5.
![Page 37: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/37.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Which is the budget line? What will happen, if income decreases and
price of X also decreases?
![Page 38: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/38.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Solution
• Budget line is YL. • The point L will not shift much. But the
point Y will shift toward below and the budget line will shift below.
![Page 39: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/39.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
What is FII?
• Foreign institutional investors• They invest money in the secondary
market – in stock markets etc.
![Page 40: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/40.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
What is private placement?
• When a company directly sells its equity to an investor, it is called private placement.
![Page 41: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/41.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
What is book building?
• The process by which shares of a company are given support by another company is called book building. The company which undertakes book building, tries to ensure that the shares don’t fall below certain level.
![Page 42: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/42.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Which is this – demand curve or supply curve?
![Page 43: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/43.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Solution
• Supply curve
![Page 44: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/44.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
What is PPC?
• Production possibility curve
![Page 45: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/45.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
What is labour mobility?
• Labour is one of the factors of production (the other factor is capital). When the labour is able to move from one place to another, it is called labour mobility.
![Page 46: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/46.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
In the following case, there is shift in a curve, identify the reason of
shift?
![Page 47: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/47.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Solution
• Supply has decreased. Answer.
![Page 48: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/48.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
What is basis point?
• In international markets, when firms go to raise funds, they get loan at LIBOR + basis point. For example, if interest rate is LIBOR + 300 basis point, and LIBOR is 5, then the rate of interest is 5.3%.
• These basis points show change from LIBOR (London Inter Bank Offered Rate).
![Page 49: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/49.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
When does the law of increasing return end?
![Page 50: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/50.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Solution
• As you can see there are three stanges: • 1. increasing returns• 2. constant returns• 3. decreasing returns
• The law of increasing returns ends at point N. answer.
![Page 51: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/51.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
what is GDP, and how is it measured?
• GDP= Gross Domestic Product.• There are 3 ways to measure it: 1. Calculate total earnings of every one and
sum it up.2. Calculate expenses of each individual in
the nation and sum it up.3. Identify total production of goods and
services in the nation by each unit and sum it up.
![Page 52: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/52.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
What is utility and what is its impact?
• Utility is the benefit that a consumer derives from consuming some product or service.
• Utility reduces with each unit of consumption• There are 2 concepts regarding utility : • 1. Cardinal utility – the utility can be
measured• 2. ordinal utility – utility cannot be measured.
![Page 53: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/53.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
What do you understand from diminishing marginal utility?
• Utility reduces with each additional unit consumed. Thus diminishing marginal utility means the utility will reduce with each unity being consumed.
• Marginal utility means the utility derived from one additional unit consumed.
![Page 54: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/54.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
What is the relation between demand & supply regarding factors
of production Real wage, W/P
Income, output, Y
Price level, P
Income, output, Y
Labor, L Labor, L
W/P1
W/P2L 5 Ld(W/P)
L2L1
Y2
Y1
Y 5 F(L)
L2L1
P2
P1
Y 5 Y 1 a(P 2 P
e)
Y2Y1
1. An increase in the price level . .
3. ...which raises employment, . .
4. ... output, . .
5. ... and income.
2. .. . reduces the real wage for a given nominal wage, . .
6. The aggregatesupply curvesummarizes these changes.
(a) Labor Demand (b) Production Function
(c) Aggregate Supply
![Page 55: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/55.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
What are the factors of production?
• There are many, some of them are : 1. Labour2. Capital3. Technology4. Entrepreneurship
We generally take only 2 factors while doing analysis : these are 1. capital 2. labour
![Page 56: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/56.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
What is short run and what is long run?
• Short run is the period in which we cannot increase the capacity of the plant. Long run is the period in which we can increase or decrease the capacity of the plant and also install or close a plant.
• In short run only one factor can be changed – labour – other factors are constant
• In long run both labour and capital can be changed. Plant capacity be altered.
![Page 57: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/57.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
What is bank rate ?
• The rate at which the central bank ( RBI in the case of India or FED bank in the case of the USA) gives loan to other bank is called bank rate.
![Page 58: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/58.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
What is PLR?
• Prime lending rate – it is the rate at which a bank gives loan to prime customer. Prime customer means the customer, whose economic conditions are very good and who is credit worthy.
![Page 59: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/59.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
What is CRR & SLR?
• CRR = cash reserve ratio (it denotes the ratio of cash held by banks against the deposits)
• SLR = statutary liquidity ratio (it denotes the ratio of investments in government and approved securities by the banks).
![Page 60: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/60.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Suppose the total deposits are 1 lakh crores in India – RBI reduces CRR by 1%, what will happen?
• 1% of 1 lakh crore = 1000 lakh crores. Thus liquidity in the market will increase by 1000 lakh crore Rupees – as bank will be able to give more loans and will be able to give money easily. Due to ease in liquidity, the industry will benefit as it will be able to get more funds easily. However, inflation may increase due to this.
![Page 61: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/61.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Which is called banker of banks or banker of last resort?
Central bank (RBI in India).
![Page 62: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/62.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
What is liquidity?
• Availability of cash / cash equivalent is called liquidity.
![Page 63: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/63.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
What is sensex?
• It is index of stock prices based 30 selected scrips. These 30 scrips are those which are selected on the basis of market capitalisation & business volumet.
• It is presented by BSE (Bombay stock exchange).
![Page 64: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/64.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
What is NIFTY?
• It is index of stock prices based 50 selected scrips. These 50 scrips are those which are selected on the basis of market capitalisation & business volumet.
• It is presented by NSE (National stock exchange).
![Page 65: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/65.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
What is NPA?
• Non performing assets –in banks, the major assets are loans given to companies / units / people. Some times some loans become overdue - those loans (assets) which are not performing – means not making regular payments of their outstanding amounts are called NPA.
• NPA word is used for banking industry.
![Page 66: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/66.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
What is CAC?
• Capital Account Convertibility. • When foreign exchange is converted into
capital account freely even in capital account, it is called capital account convertibility.
• Capital account here mean money raised for capital projects / investment purpose etc.
![Page 67: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/67.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
What is LC?
• Letter of credit, = when a bank gives loan against export documentation, it is called LC. For example, if you export some goods, the buyer send you acceptance of the bill and the bank of the buyer gives guarantee, then your bank can give you loan agains these documents. This is called LC.
![Page 68: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/68.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
What is packing credit?
• When you have received an order from an importer for some goods and you want to make goods as per the order, then you may take packing credit from the banks. In packing credit the bank gives you loan for purchasing raw material, and other working capital expenses. It is given for period till exports are sent – later LC is given.
![Page 69: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/69.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
What is forex reserves?
• Foreign exchange reserves of a country is called forex reserve.
• It will increase in following cases : If FDI will increase, FII will invest more money and exports will increase, increase of tourists to your country, repatriation of money by NRIs (non residents Indians),
![Page 70: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/70.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
What is IRS?
• INTEREST RATE SWAP• Banks use these instruments to minimise
their risks.
![Page 71: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/71.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
What is ALM?
• Asset liability management – banks try to match the cash flows of cash inflow and cash outflow through ALM. They try to match their assets and liabilities.
• Banks’s assets are its loans• Bank’s liabilities are its deposits • Matching them is called ALM.
![Page 72: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/72.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
What is hedging?
• When banks use various instruments like swaps, options etc. to reduce their risk exposure it is called hedging.
![Page 73: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/73.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
What FCD?
• Fully convertible debentures.
![Page 74: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/74.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
What is market capitalisation?
• No. of shares multiplied to the market price per share.
• For example, the share of reliance is quoted at Rs. 1250. suppose there are 100 shares in the market. The market capitalisation is 125000.
![Page 75: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/75.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
What do you understand from reverse mortgage?
• In mortgage, a person goes to bank and puts his land / building as mortgage to obtain loans (humge amount simultaneously) from bank and then he used to repay it in long time. In reverse mortgage, the bank gives land / building to the other person and gives money also on monthly basis and takes back the land / building after long time. (many old age persons are resorting to this option for maintaining their living)
![Page 76: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/76.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
What is microfinance?
• Raising small deposits (let us say Rs. 10 per month) – pooling this money together and Giving loan in very small amount (let us say Rs. 2000) so that a person may start a micro-enterprise – and can become self dependent. It is very successful business model –as has been proved by Gramin Bank and SEWA.
![Page 77: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/77.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
ABOUT AFTERSCHO☺OL
Afterschoool conducts three year integrated PGPSE (after class 12th along with IAS / CA / CS) and 18 month PGPSE (Post Graduate Programme in Social Entrepreneurship) along with preparation for CS / CFP / CFA /CMA / FRM. This course is also available online also. It also conducts workshops on social entrepreneurship in schools and colleges all over India – start social entrepreneurship club in your institution today with the help from afterschoool and help us in developing society.
![Page 78: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/78.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Why such a programme?
• To promote people to take up entrepreneurship and help develop the society
• To enable people to take up franchising and other such options to start a business / social development project
• To enable people to take up social development as their mission
• To enable people to promote spirituality and positive thinking in the world
![Page 79: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/79.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Who are our supporters?
• Afterschoolians, our past beneficiaries, entrepreneurs and social entrepreneurs are supporting us.
• You can also support us – not necessarily by money – but by being promotor of our concept and our ideas.
![Page 80: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/80.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
About AFTERSCHO☺OL PGPSE – the best programme for developing great
entrepreneurs• Most flexible, adaptive but rigorous programme• Available in distance learning mode• Case study focused- latest cases • Industry oriented practical curriculum• Designed to make you entrepreneurs – not just
an employee• Option to take up part time job – so earn while
you learn • The only absolutely free course on internet
![Page 81: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/81.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Workshops from AFTERSCHO☺OL
• IIF, Delhi• CIPS, Jaipur• ICSI Hyderabad Branch• Gyan Vihar, Jaipur• Apex Institute of Management, Jaipur• Aravali Institute of Management, Jodhpur• Xavier Institute of Management, Bhubaneshwar • Pacific Institute, Udaipur• Engineering College, Hyderabad
![Page 82: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/82.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Flexible Specialisations:• Spiritualising business and society• Rural development and transformation• HRD and Education, Social Development• NGO and voluntary work• Investment analysis,microfinance and inclusion • Retail sector, BPO, KPO• Accounting & Information system (with CA / CS /CMA)• Hospital management and Health care• Hospitality sector and culture and heritage• Other sectors of high growth, high technology and social
relevance
![Page 83: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/83.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Salient features:• The only programme of its kind (in the whole world)• No publicity and low profile course• For those who want to achieve success in life – not just a
degree• Flexible – you may stay for a month and continue the rest of
the education by distance mode. / you may attend weekend classes
• Scholarships for those from poor economic background• Latest and constantly changing curriculum – keeping pace
with the time• Placement for those who are interested• Admissions open throughout the year • Latest and most advanced technologies, books and study
material
![Page 84: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/84.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Components • Pedagogy curriculum and approach based on IIM Ahmedabad and ISB
Hyderabad (the founder is alumnus from IIMA & ISB Hyderabad)• Meditation, spiritualisation, and self development • EsGotitial softwares for business• Business plan, Research projects• Participation in conferences / seminars• Workshops on leadership, team building etc. • Written submissions of research projects/articles / papers• Interview of entrepreneurs, writing biographies of entrepreneurs• Editing of journals / newsletters• Consultancy / research projects • Assignments, communication skill workshops• Participation in conferences and seminars• Group discussions, mock interviews, self development diaryng • Mind Power Training & writing workshop (by Dr. T.K.Jain)
![Page 85: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/85.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Pedagogy • Case analysis,• Articles from Harvard Business Review • Quiz, seminars, workshops, games, • Visits to entrepreneurs and industrial visits• PreGotitations, Latest audio-visuals• Group discussions and group projects• Periodic self assessment• Mentoring and counselling• Study exchange programme (with institutions out of
India)• Rural development / Social welfare projects
![Page 86: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/86.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Branches
• AFTERSCHO☺OL will shortly open its branches in important cities in India including Delhi, Kota, Mumbai, Gurgaon and other important cities. Afterschooolians will be responsible for managing and developing these branches – and for promoting social entrepreneurs.
![Page 87: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/87.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Case Studies
• We want to write case studies on social entrepreneurs, first generation entrepreneurs, ethical entrepreneurs. Please help us in this process. Help us to be in touch with entrepreneurs, so that we may develop entrepreneurs.
![Page 88: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/88.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
Basic values at AFTERSCHO☺OL
• Share to learn more• Interact to develop yourself• Fear is your worst enemy• Make mistakes to learn • Study & discuss in a group• Criticism is the healthy route to mutual support
and help • Ask fundamental questions : why, when, how &
where?• Embrace change – and compete with yourself
only
![Page 89: Accounting & Economics For Business 7 November Ii](https://reader035.vdocuments.us/reader035/viewer/2022081521/54c44d054a795929658b4572/html5/thumbnails/89.jpg)
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
www.afterschoool.tk social entrepreneurship for better
society