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CMAT Test: Practice Questions - 1 Free Online Test 2026


MCQ Practice Test & Solutions: Test: Practice Questions - 1 (20 Questions)

You can prepare effectively for CAT CMAT Mock Test Series with this dedicated MCQ Practice Test (available with solutions) on the important topic of "Test: Practice Questions - 1". These 20 questions have been designed by the experts with the latest curriculum of CAT 2026, to help you master the concept.

Test Highlights:

  • - Format: Multiple Choice Questions (MCQ)
  • - Duration: 20 minutes
  • - Number of Questions: 20

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Test: Practice Questions - 1 - Question 1
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Large investment is made in fixed assets, the project will be termed as __________.

Detailed Solution: Question 1

When a project requires a large investment in fixed assets like machinery, equipment, and infrastructure, it's called capital intensive. This means the project relies more on capital than labor to generate output. An interesting fact is that industries like manufacturing, utilities, and telecommunications are often capital intensive because they require significant upfront investment in heavy equipment and infrastructure to operate efficiently.

Test: Practice Questions - 1 - Question 2
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The term ___________ denotes bonus or financial aid which is given by a government to an industry to help it compete with other units.

Detailed Solution: Question 2

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Test: Practice Questions - 1 - Question 3
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____________ is used to accomplish the project economically in the minimum available time with limited resources.

Detailed Solution: Question 3

Network Analysis is a technique used to plan and manage projects by identifying the best path to take considering the limitations in time and resources. This method helps in understanding how different tasks depend on each other and what sequence will allow the project to be completed in the shortest possible time. An interesting fact about network analysis is that it can also reveal the critical path in a project, which is the sequence of tasks that determines the shortest possible duration to complete the project.

Test: Practice Questions - 1 - Question 4
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PERT stands for __________.

Detailed Solution: Question 4

Program evaluation and review technique

PERT stands for Program Evaluation and Review Technique. Hence, the correct answer is option (2)

Test: Practice Questions - 1 - Question 5
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____________ is a form of financing especially for funding high technology, high risk, and perceived high reward projects.

Detailed Solution: Question 5

Venture capital is specialized financing provided to startups and small businesses that are believed to have long-term growth potential. It is particularly notable for funding high-risk, high-reward projects in sectors like technology and biomedicine. An interesting additional fact is that venture capitalists not only provide funding but often bring valuable expertise, mentoring, and access to networks, which can be crucial for a startup's success.

Test: Practice Questions - 1 - Question 6
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In _________, machines and equipments are arranged in the order or sequence in which they are to be used for manufacturing the product.

Detailed Solution: Question 6

In a Product Layout, machinery and equipment are arranged in a line following the sequence of operations required to manufacture a product. This layout is efficient for mass production of standardized products because it minimizes movement and handling. An interesting fact is that the assembly line in automobile manufacturing is a classic example of product layout, demonstrating its efficiency in producing large volumes of products.

Test: Practice Questions - 1 - Question 7
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The granting of cash subsidy on the capital investment is called __________.

Detailed Solution: Question 7

The Central Investment Subsidy is specifically aimed at encouraging investment by providing a cash subsidy based on the amount of capital investment made by a company. This type of subsidy is particularly used in regions or sectors where the government wants to stimulate economic growth and development. An interesting fact is that such subsidies are often part of broader economic development programs aimed at attracting new businesses and creating jobs in targeted areas.

Test: Practice Questions - 1 - Question 8
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New Small Scale industries are exempted from the payment of income tax under section 80J is called __________

Detailed Solution: Question 8

A Tax Holiday is a temporary reduction or elimination of a tax. It is given to encourage investment in certain sectors or regions. When new small-scale industries are exempted from income tax, it's known as a tax holiday, which is designed to support the growth of these businesses. An interesting fact is that tax holidays can significantly impact the early stages of a business by improving cash flow and enabling reinvestment in growth and development.

Test: Practice Questions - 1 - Question 9
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________ is primarily concerned with the identification of the project demand potential and the selection of the optimal technology.

Detailed Solution: Question 9

Techno-economic analysis involves evaluating a project's technological requirements and its economic feasibility, focusing on understanding demand potential and choosing the best technology. This analysis is crucial in the planning phase to ensure that the project is viable from both a technical and economic perspective. An interesting fact is that techno-economic analysis is often used in the energy sector to assess the viability of new technologies, such as renewable energy sources.

Test: Practice Questions - 1 - Question 10
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Activities which must be finished before a given event can occur are termed as _________.

Detailed Solution: Question 10

Preceding Activities are those tasks that must be completed before a certain point or event in a project can proceed. Understanding the relationship between tasks is essential for effective project scheduling and management. An interesting fact is that identifying and managing preceding activities helps in the creation of a project's critical path, which is the longest sequence of activities that must be completed on time for the project to finish by its due date.

Test: Practice Questions - 1 - Question 11
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Sub – contracting is a ___ beneficially ___ relationship between two companies.

Detailed Solution: Question 11

Sub-contracting establishes a mutually beneficial commercial relationship between two companies, where one company outsources part of its work to another to leverage specialized skills or cost efficiencies. This arrangement allows companies to focus on their core competencies while relying on partners for specific tasks. An interesting fact about sub-contracting is that it's a common practice in industries such as construction, where specialized tasks (like electrical or plumbing work) are often subcontracted to firms with the necessary expertise.

Test: Practice Questions - 1 - Question 12
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____________ describes the direction, the enterprise is going in, what its goals are, where it wants to be, and how it is going to get there.

Detailed Solution: Question 12

A project report outlines the enterprise's direction, goals, desired outcomes, and strategies for achieving these objectives. It serves as a roadmap for the project, providing detailed information on every aspect, from technical and market analysis to financial projections. An interesting fact about project reports is that they are often used to communicate the project's viability and strategic value to stakeholders, including investors, partners, and regulatory bodies, helping in securing support and approvals.

Test: Practice Questions - 1 - Question 13
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Every entrepreneur should draw an _______ for his project to ensure the timely completion of all activities involved in setting up an enterprise.

Detailed Solution: Question 13

An implementation plan is crucial for any entrepreneur as it lays out the steps, timelines, and resources needed to complete all activities for setting up an enterprise. It helps in organizing tasks, allocating resources effectively, and tracking progress towards objectives. An interesting fact about implementation plans is that they can also aid in identifying potential risks and bottlenecks early in the process, allowing for timely adjustments to keep the project on track.

Test: Practice Questions - 1 - Question 14
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The market potential of the project report includes ___.

Detailed Solution: Question 14

The market potential of a project report encompasses all aspects that affect its success in the market, including demand and supply conditions, market strategy, and after-sales service. Understanding these elements helps in evaluating the project's viability and potential profitability. An interesting fact is that a thorough analysis of market potential can uncover opportunities and challenges that might not be apparent at the project's outset, enabling better strategic planning and decision-making.

Test: Practice Questions - 1 - Question 15
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Today, many companies are using managerial techniques that are designed to encourage ___.

Detailed Solution: Question 15

Encouraging ethical behavior has become a crucial focus for companies worldwide, utilizing managerial techniques to foster a culture of integrity and responsibility. This includes implementing codes of conduct, ethical training programs, and mechanisms for reporting unethical behavior. An interesting fact is that companies with strong ethical cultures tend to perform better in the long run, as they build trust with their customers, employees, and stakeholders, leading to sustainable success.

Test: Practice Questions - 1 - Question 16
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Entrepreneurial development is the key to achieve all-round __________ through acceleration of industrial and entrepreneurial activities.

Detailed Solution: Question 16

Entrepreneurial development is crucial for economic development, as it leads to the creation of new businesses, innovations, and employment opportunities, driving the overall growth and prosperity of a society. By fostering entrepreneurship, countries can diversify their economies, enhance productivity, and improve living standards. An interesting fact is that many governments offer support programs, including funding, training, and mentorship, to encourage entrepreneurial activities as a strategy for economic development.

Test: Practice Questions - 1 - Question 17
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SWOT Analysis is a _____________ tool.

Detailed Solution: Question 17

SWOT Analysis is a modern tool used for strategic planning, helping organizations assess their Strengths, Weaknesses, Opportunities, and Threats. It provides a framework for analyzing internal and external factors that may impact the entity's ability to achieve its objectives. An interesting fact about SWOT analysis is that it originated in the 1960s and remains widely used across industries today, demonstrating its versatility and enduring relevance in strategic decision-making.

Test: Practice Questions - 1 - Question 18
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NABARD is a Bank for __________development.

Detailed Solution: Question 18

NABARD, or the National Bank for Agriculture and Rural Development, is dedicated to fostering agricultural and rural development in India. It provides finance and support for projects aimed at improving agriculture, cottage and small-scale industries, and rural crafts. An interesting fact about NABARD is that it plays a crucial role in implementing government schemes and initiatives aimed at rural development, making it a key institution in the country's efforts to promote sustainable growth and poverty reduction in rural areas.

Test: Practice Questions - 1 - Question 19
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A _________ is a graphical representation of the various activity and event relating to a project.

Detailed Solution: Question 19

A Network Diagram is a graphical representation that shows the sequence of activities and events in a project, including their dependencies. It is a crucial tool for project management, helping teams visualize the workflow and identify critical paths. An interesting fact is that network diagrams can be used in conjunction with project management methodologies like PERT and CPM (Critical Path Method) to optimize project schedules and resource allocation, enhancing efficiency and effectiveness in project execution.

Test: Practice Questions - 1 - Question 20
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Activities which are undertaken simultaneously during the project's lifecycle are known as _________.

Detailed Solution: Question 20

Concurrent Activities are tasks that occur at the same time during a project's lifecycle. Managing these activities efficiently is crucial for optimizing the project timeline and ensuring resources are utilized effectively. An interesting fact about concurrent activities is that their successful coordination often requires careful planning and communication, as well as the use of project management tools to monitor progress and resolve any conflicts or dependencies between tasks.

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About this CAT Practice Test

This test contains 20 MCQs on Practice Questions - 1 with detailed solutions for each question. It is part of the CMAT Mock Test Series course on EduRev, designed to align with the current CAT syllabus. Each solution explains not just the correct answer but also gives you an understanding of the topic — not just to attempt the question but also help you prepare for the exam with practice.

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