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Net Monthly income of an employee was Rs. 800 in 1980. The consumer price Index number was 160 in 1980. It is rises to 200 in 1984. If he has to be rightly compensated. The additional dearness allowance to be paid to the employee is:
  • a)
    Rs. 240
  • b)
    Rs. 275
  • c)
    Rs. 250
  • d)
    None of these 
Correct answer is option 'A'. Can you explain this answer?
Most Upvoted Answer
Net Monthly income of an employee was Rs. 800 in 1980. The consumer pr...
To calculate the additional dearness allowance to be paid to the employee, we need to compare the increase in the Consumer Price Index (CPI) from 1980 to 1984.

Given:
Net Monthly income in 1980 = Rs. 800
CPI in 1980 = 160
CPI in 1984 = 200

To find the increase in the CPI, we can use the following formula:

Increase in CPI = (CPI in 1984 - CPI in 1980) / CPI in 1980 * 100

Plugging in the values, we get:

Increase in CPI = (200 - 160) / 160 * 100 = 40 / 160 * 100 = 25%

This means that the overall cost of living has increased by 25% from 1980 to 1984. Therefore, the employee should be compensated with an additional dearness allowance to cover this increase.

To calculate the additional dearness allowance, we can use the following formula:

Additional dearness allowance = Net Monthly income in 1980 * Increase in CPI / 100

Plugging in the values, we get:

Additional dearness allowance = 800 * 25 / 100 = 20000 / 100 = Rs. 200

Therefore, the additional dearness allowance to be paid to the employee is Rs. 200.

However, none of the given options match the calculated amount. Therefore, the correct answer is None of these.
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Community Answer
Net Monthly income of an employee was Rs. 800 in 1980. The consumer pr...
200 hence none of these is correct
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Net Monthly income of an employee was Rs. 800 in 1980. The consumer price Index number was 160 in 1980. It is rises to 200 in 1984. If he has to be rightly compensated. The additional dearness allowance to be paid to the employee is:a)Rs. 240b)Rs. 275c)Rs. 250d)None of theseCorrect answer is option 'A'. Can you explain this answer?
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Net Monthly income of an employee was Rs. 800 in 1980. The consumer price Index number was 160 in 1980. It is rises to 200 in 1984. If he has to be rightly compensated. The additional dearness allowance to be paid to the employee is:a)Rs. 240b)Rs. 275c)Rs. 250d)None of theseCorrect answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Net Monthly income of an employee was Rs. 800 in 1980. The consumer price Index number was 160 in 1980. It is rises to 200 in 1984. If he has to be rightly compensated. The additional dearness allowance to be paid to the employee is:a)Rs. 240b)Rs. 275c)Rs. 250d)None of theseCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Net Monthly income of an employee was Rs. 800 in 1980. The consumer price Index number was 160 in 1980. It is rises to 200 in 1984. If he has to be rightly compensated. The additional dearness allowance to be paid to the employee is:a)Rs. 240b)Rs. 275c)Rs. 250d)None of theseCorrect answer is option 'A'. Can you explain this answer?.
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