QUESTION SET-4 (CBSE COMMERCE NET )


               DEAR READERS,

                   Here is another entry in question set series!


              11. Given :

            Margin of Safety
 80,000
           Profit
 20,000
           Sales
 3,00,000
           What is the amount of Fixed Cost ?
            (1)        1,00,000                (2)        75,000                    (3)        55,000                              (4)        20,000
           ANSWER:-3
          EXPLANATION:- as we know that MARGIN OF SAFETY = PROFIT/ PV              RATIO
           80,000=20,000 /PV RATIO
           PV RATIO=.25=25%
           CONTRIBUTION=SALES* PV RATIO
                            =3,00,000*25%
                            =75,000
          CONTRIBUTION-FIXED COST=PROFIT
          75,000-FIXED COST=20000
          FIXED COST=55,000

         12.Which of the following  is  not  regulated by The Competition Act, 2002 ?
(A)        Abuse of dominant position
( B)    Anti- competitive agreements
(C)     Medical Negligence
(D)    Predatory pricing
ANSWER:-C
EXPLANATION:- Competition Act 2002 regulates all the three activities except medical negligence .Medical negligence comes under various laws such as consumer protection act IPC etc.
Abuse of dominant position efers to a situation where a firm or group of firms uses its dominate position to eliminate competition or to use it in its favour.
Anti-competitive agreement is a agreement between people association of person or a group with a view of reducing competition in the form of price fixing ,collusion ,bid rigging, cartel.
predatory pricing is a strategy of reducing competition where the price is fixed so low that other competitors feels better to leave the market rather than to compete.  


13.  In the managerial grid, the managers who have little or no concern for production but are concerned only  for people are known as what type of managers ?
(A)        1.1 Management
(B)        5.5 Management
(C)        9.1 Management

(D)        1.9 Management
ANSWER:-D
EXPLANATION:-managerial grid is a leadership model developed by ROBERT R. BLAKE and JANE MOUTON
1.1 Management  (impoverished style) shows low concern for production and people both.
5.5 Management (middle of the road style)  shows equal concern for both.
9.1 Management (produce or perish style) shows low concern for people and high concern for production.
1.9 Management (country club style ) shows high concern for people and low concern for production
9.9 Management ( team style) shows high concern for both .




14.The regression equation of profits (X) on sales (Y) of a firm is given as : 3Y – 5X + 110 = 0. If the sales of the firm is ` 44,000, the profit will be                                                (A)  ` 23,370           (B)       ` 26,422 (C)    ` 24,422           (D)       ` 21,370
ANSWER:-B
EXPLANATION:-if we replace y with 44,000
we get the equation like this 3*44,000-5X+110=0
                                              132110=5X
                                              X==26442


15 .   Dividend irrelevance hypothesis is implied in the-
(A)        Traditional Model
(B)        Walter Model
(C)        Gordon Model
(D)        M.M. Model
ANSWER:-D
EXPLANATION:-MM MODEL  uses arbitrage proof to show that dividend policy has no  effect on the price of shares of firm.


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