Summers Process - Company Snapshot - Avalon Cnslting

Overview

Avalon Consulting, setup in 1989, is an international management consulting firm that advises clients across the world on strategy, business transformation and innovation. Apart from Avalon Consulting, the Group has two other entities – Avalon Global Research, a global market research firm geared to do very quick, high-level (one day) product, sector or country studies as well as full-fledged research exercises; and Ugam Solutions, a leading provider of Marketing Analytics for global MR firms, management consultants and corporates.
Their consulting practice was founded in 1989 as Business Consulting Group and rechristened in 2003 as Avalon Consulting. They operate out of offices in Mumbai, Delhi and Chennai and serve clients in.

Avalon has engaged effectively with clients across the spectrum of business covering corporations, financial institutions, private equity companies, venture capitalists, government bodies and industry associations. They have executed assignments in over 50 countries around the world giving them wide geographical experience which enables us to maintain a global perspective while retaining the local flavour of individual markets.

Practise Areas

• Strategy
  
• Avalon strategy practice offers clients a range of options.
  Corporate and Business Strategy
  
  Mergers & Acquisitions Strategy
  
  Product and Market Strategy
  
  Brand Portfolio Strategy
  
  Supply Chain Strategy
  
  Pricing and Promotion Strategy
  
  Strategic Cost Management
  
  Cash Cycle Optimisation Strategy

• Transformation
• Innovation

Sectors Covered
• Agri Business
• Automotive
• Chemicals
• Engineering & Metals
• Energy
• Financial Services
• Pharma & Health Care
• Infrastructure

Client Locations: India, China, Europe, USA and the Middle-East

Client Base
India : AV Birla Group, Ashok Leyland, Asian paints, DSCL, Tata Group, Larsen & Toubro, Mahindra Group..
Middle East : Al Emar, ARASCO, Arabian Capital, Oman Cables, Sadolin Paints
MNC : ConAgra Foods, Dow Chemical, BASF, Monsanato, Pepsico Foods, World Kitchen

Note: Avalon Consulting Site http://www.consultavalon.com

Microeconomics Demystified - Answer Key

ANSWER KEY

1 d
2 a
3 b
4 d
5 a
6 b
7 d
8 b
9 d
10 a
11 b
12 b
13 d
14 d
15 d

Microeconomics Demystified

1. Which of the following is not part of the opportunity cost of going on holiday?
a. the money you could have earned if you didn’t take time off work
b. the goods that could have been purchased with the money spent on an airline ticket
c. the classes you missed through going on holiday
d. the money you spent on food

2. Which of the following is not a barrier to entry in a monopolized market?
a. A single firm is very large.
b. The government gives a single firm the exclusive right to produce some good.
c. The costs of production make a single producer more efficient than a large number of producers.
d. A key resource is owned by a single firm.


3. Which of the following is not true of short-run costs?
a. The difference between average total cost and average variable cost diminishes as output
increases.
b. Average cost and average fixed cost are U-shaped.
c. Marginal cost cuts average variable cost and average total cost at their minimum point.
d. Marginal cost is above average total cost when average total cost is rising.

4. When firms exit a market, there is
a. a leftward shift of the market supply curve
b. an increase in profits for existing firms
c. a decrease in the equilibrium level of output for the market
d. all of the above

5. According to the law of diminishing returns, beyond a certain output level
a. marginal cost must rise
b. total cost must fall
c. average cost must fall
d. marginal cost must fall


6. Normal profits
a. are a feature of competitive markets only
b. are a characteristic of ‘mature industries’
c. never occur in oligopolistic industries
d. can only occur in the long run


7. If the cross-price elasticity of demand is negative,
a. the two goods are complements
b. demand for one good increases while demand for the other decreases
c. the two goods may be substitutes or complements, depending on the direction of the price change
d. the two goods are substitutes

8. Which of the following is not true in the case of the perfectly competitive firm?
a. Marginal revenue equals average revenue.
b. Marginal revenue is less than average revenue.
c. Price remains constant when quantity sold changes.
d. Firms and buyers are completely informed about the prices of the products of each firm in the industry.

9. If price falls below the minimum of average variable cost, the best a firm can do is
a. increase production
b. reduce production
c. cease production and make a loss equal to variable cost
d. cease production and make a loss equal to total fixed cost

For Questions 10-12 refer below diagram





10. Given the market price, P0, the firm is
a. making a loss
b. breaking even
c. making a supernormal profit
d. making shut-down losses

11. Given price P0, in the long run
a. demand will decrease
b. supply will decrease
c. demand will increase
d. supply will increase

12. Given the market price P0, in the long run
a remaining firms will reduce production
b remaining firms will increase production
c remaining firms will maintain current production levels
d remaining firms will enjoy supernormal profit



For questions 13 and 14 refer below diagram



13. If the monopolistic competitor described above is producing at the profit-maximizing (loss-minimizing) level of output, it
a. is generating zero profits.
b. is generating profits.
c. could be generating either profits or losses depending on what quantity it chooses to produce.
d. is generating losses.

14. The monopolistically competitive market shown above will, in the long run,
a. attract new producers into the market, which will shift the demand faced by incumbent firms to the left.
b. attract new producers into the market, which will shift the demand faced by incumbent firms to the right.
c. cause producers to exit the market, which will shift the demand faced by incumbent firms to the left.
d. cause producers to exit the market, which will shift the demand faced by incumbent firms to the right.


15. The diagram above represents an industry that was in perfect competition that has become a monopoly. The area that shows the deadweight loss that will result under the monopoly is depicted by
a. 7
b. 3
c. 5
d. Both b and c

Accountancy Demystified - Part 2 - Answer Key

Answer key:
1. B
2. A
3. C
4. B
5. C
6. B
7. A
8. C
9. B
10. A
11. B
12. A
13. A
14. A
15. C

Accountancy Demystified - Part 2

1. Which of the following methods is not permitted by the Indian Accounting Standards for inventory valuation?

a) FIFO

b) LIFO

c) Weighted Average Method

2. IDBI Ltd., a banking organization, received interest on its loans to the tune of Rs. 500 thousand for the month June, 2009. The amount would be reflected as –

a) An operating activity

b) An investing activity

c) A financing activity

3. MAT stands for:

a) Minimum Allowable Tax

b) Minimum Alternative Tax

c) Minimum Alternate Tax

4. Inventories are valued at –

a) Cost price or realisable value, whichever is higher.

b) Cost price or realisable value, whichever is lower.

c) Cost price or realisable value, whichever is equal to the last year’s stock value.

5. A company manufactures biscuits for which the production cost/unit is –

Raw material = Rs. 3

Direct Labor = Rs. 1

Direct Expenses = Rs. 2

Normal capacity = 5000 units/annum

Actual production = 4000 units/annum

Fixed production overheads = Rs. 12000/annum

The company has unsold stock of 1500 units at the year end.

Calculate the value of closing stock.

a) Rs. 21000

b) Rs. 9008

c) Rs. 12600

6. As per revenue recognition concept, revenue does not include –

a) Sale of goods

b) Revenue from government grants/subsidies

c) Use of enterprise by others yielding interest, dividend and royalties.

7. Justification for method of determining periodic deferred tax is based on the concept of

a) Matching of periodic expense to periodic revenue

b) Objectivity in the calculation of periodic expense.

c) Recognition of assets and liabilities.

8. A company is building up a factory to start a new production unit. The construction work is going on. How would this be reflected as in the balance sheet?

a) Capital

b) Investment

c) Capital work-in-progress

9. A company had a provision for dividend balance of Rs. 50000 on 1st April, 2006 while it jumped to Rs. 100000 as on 31st March, 2007. The company paid a dividend of Rs. 10000 during the year. Compute the current year’s provision for dividend.

a) Rs. 50000

b) Rs. 60000

c) Rs. 40000

10. Profit for the year 2008 amounted to Rs. 5 lacs. The profit was calculated after providing depreciation of Rs. 50000 but before amortising goodwill of Rs. 10000. The net increase in current assets amounted to Rs. 10000 while net increase in current liabilities amounted to Rs. 25000. Tax paid during the year was 10000. What would be the cash flow from operating activities?

a) Rs. 555000

b) (Rs. 555000)

c) Rs. 455000

11. An FMCG giant recently acquired 5% stake in an edible oil company. The stake was purchased through equity shares, amounting Rs. 2.2 million. This amount would be reflected as –

a) Cash flow from operating activities

b) Cash flow from investing activities

c) Cash flow from financing activities

12. As per revenue recognition concept, payment received in advance is recognized as –

a) A liability

b) An asset

c) A revenue item

13. What is the other name for Income Statement?

a) Profit and Loss Account

b) Income and Expenditure Account

c) Statement of PAT

14. Provision for discount on creditors is shown as –

a) Deduction from creditors in the balance sheet.

b) Addition to creditors in the balance sheet.

c) Shown on the debit side of Income statement.

15. Which of the following is not a method for calculating depreciation?

a) Straight Line Method

b) Sinking Fund

c) Cost of Market Value

Accountancy Demystified - Part 1 - Answer Key

Answer key:
1. B
2. C
3. A
4. A
5. A
6. A
7. B
8. C
9. B
10. A
11. A
12. C
13. B
14. A
15. A

Accountancy Demystified - Part 1

1. ABC Ltd had a balance of debtors amounting to Rs 10,000 on 1^st April 2007 and of Rs 6000 on 31^st March 2008. The change in value would lead to:

a. Increase in working capital

b. Decrease in working capital

c. No change

2. Trade discounts are shown as

a. Discount account debited

b. Discount account credited

c. Not shown at all!!!

3. If current year’s accounting income is larger than the taxable income then

a. Create deferred tax liability

b. Create deferred tax asset

c. No deferred tax would be created

4. Which of the following is not considered as depreciable assets:

a. Livestock

b. Freehold premises

c. Plant

5. What does AS-1 deal with?

a. Presentation of financial statements

b. Cash flows

c. Inventory

6. The machinery account showed a balance of Rs 1,00,000 on 31st Mar 2008 and Rs 2,00,000 on 31st Mar 2009. A machine costing Rs 10000 was sold for Rs 8000. Accumulated depreciation on the said machine was Rs 3000. What would be the net purchase of machine during the year?

a. Rs 1,10,000

b. Rs 1,11,000

c. Rs 1,08,000

7. A company values its stock on the basis of the FIFO method. On 1st July 2009, it purchased 500 kg at Rs 7.50/kg. On 5th July, it sold 400 kg Rs 7.50/kg. On 6th July, it purchased 700kg at Rs 10/kg. On the 8th July, the company sold 200kg. The total inventory balance remaining is:

a. 7750

b. 6000

c. 1750

8. Profit for the year 2006 was Rs 50,00,000. The company had purchased a machine worth Rs 5,00,000 on which 20% was charged as depreciation (SLM). The IT department allowed 100% depreciation in the 1st Year. How much DTA / DTL would be created?

a. DTL of Rs 5 lakh

b. DTA of Rs 4 lakh

c. DTL of Rs 4 lakh

9. Which of the following is the correct entry for salaries paid to employees?

a. Salaries a/c Dr 5000

To Employees 5000

b. Salaries a/c Dr 5000

To Cash a/c 5000

c. Cash a/c Dr 5000

To Salaries 5000

10. What does the accounting equation look like?

a. Assets = Liabilities + Capital

b. Liabilities = Assets + Capital

c. Capital = Assets + Liabilities

11. A financial lease

a. Transfers substantially all the risks and rewards incident to ownership of an asset

b. Does not transfer the risks and rewards

c. Can be used by lessee as per his / her own will

12. ABC Ltd purchased a machinery worth Rs 1,00,000 in the year 2004. The accumulated depreciation on this machine amounted to Rs 15,000 upto 2009. In 2009, the company sold the machine for Rs 70,000. The profit / loss incurred and Rs 70000 (the sale asset) will be shown as

a. Rs 15000 gain as a subtraction from operating activity and Rs 70000 as an investing activity

b. Rs 30000 loss as subtraction from operating activity and Rs 70000 as an investing activity

c. Rs 15000 loss as an addition to operating activity and Rs 70000 as an investing activity

13. Goodwill is classified as a

a. Current asset

b. Fixed asset

c. Fixed Liability

14. Which of the following indicates accrual concept?

a. Salary of Rs 2000 earned but not received is shown in the P&L account

b. Commission paid which accrued to last year shown in P&L account

c. Income received in advance included in P&L account

15. Which of the following costs are included while calculating cost of inventory?

a. Cost of purchase + Cost of conversion + Other costs incurred in bringing the inventories to their current location and condition

b. Cost of Purchase + Conversion + Storage costs

c. Cost of Purchase + Conversion cost + wages paid to workers