Total No. of Questions [Total No. of Pages 02
MBA YEARS) DEGREE EXAMINATION, MAY 2017
First Year
HOSPITAL ADMINISTRATION
Hospital Economics and Financial Management
Time 3 Hours Maximum Marks 70
Section A
Answer any three × 5 15]
Q1) Determinants of Demand
Time value of money
BEP analysis
Stock dividend
EOQ
Operating cycle
Section B
Answer any three × 15 45]
Q2) What is elasticity of demand? Explain about difference types of elasticity of demand.
Q3) Explain about the procedure of price determinate under perfect competition.
Q4) Discuss the various methods of investment appraisals.
Q5) Explain about relevance and irrelevance dividend theories in brief.
Q6) Define working capital and explain the determination of working capital.
Q7) Explain above various lay term sources of finance along with their merits demerits.
Section C
Compulsory
Q8) Case study
A company is considering an investment proposed to install a new machine. The
project will cost Rs. 50,000 and will have a life of 5 years and no salvage value. The
company's tax rate is 50% and no investment allowance is allowed. This firm uses
straight line method of depreciation. The estimated net income before depreciation and
tax from the proposed investment proposal are as follows
Year Net Income before Depreciation and Tax

1 10,000
2 11,000
3 14,000
4 15,000
5 25,000
Compute the following
Payback period
Average rate of return
Net present value at 10% discount rate
Profitability Index at 10% discount rate
Following are the present value factors at 10%
Year 1 2 3 4 5
PV factors at 10% 0.909 0.826 0.751 0.683 0.621