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TS SET Paper 2 Mock Test - 3 (Commerce) - TS TET MCQ


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30 Questions MCQ Test - TS SET Paper 2 Mock Test - 3 (Commerce)

TS SET Paper 2 Mock Test - 3 (Commerce) for TS TET 2024 is part of TS TET preparation. The TS SET Paper 2 Mock Test - 3 (Commerce) questions and answers have been prepared according to the TS TET exam syllabus.The TS SET Paper 2 Mock Test - 3 (Commerce) MCQs are made for TS TET 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for TS SET Paper 2 Mock Test - 3 (Commerce) below.
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TS SET Paper 2 Mock Test - 3 (Commerce) - Question 1

"The life expectancy of people in Kerala is more than that of Tamil Nadu." This statement is an example of:

Detailed Solution for TS SET Paper 2 Mock Test - 3 (Commerce) - Question 1

A correlation is simply defined as a relationship between two variables. The whole purpose of using correlations in research is to figure out which variables are connected. The correlational Hypothesis states merely that the variables occur together in some specified manner without implying that one causes the other. For example, Level of job commitment of the officers is positively associated with their level of efficiency. Here, we do not make any claim that one variable causes the other to change. That will be possible only if we have control over all other factors that could influence our dependent variable.

TS SET Paper 2 Mock Test - 3 (Commerce) - Question 2

Which of the given combinations of the following factors influence the working capital requirement?

I. Market conditions

II. Production policy

III. Firm's goodwill

IV. Supply conditions

Detailed Solution for TS SET Paper 2 Mock Test - 3 (Commerce) - Question 2

Factors influencing the working capital requirement are:
  • Market conditions: If the competition is intense, then the company has to spend a lot of money on running advertising campaigns and sales promotions. It will also have to keep more stock and sell on credit. So, it will require more working capital.
  • Production policy: A service company usually has a short operating cycle or period. It also sells on a cash basis. So, it requires less working capital. For example, electricity and transport companies.
  • Supply conditions: The working capital requirements of the company depends on the conditions of supply. If the supply of raw materials is regular, then the company can keep less inventory (stock). So, it will require less working capital. But, if the supply is irregular then the company has to hold more stock. Therefore, in such a case, it will need more working capital.

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TS SET Paper 2 Mock Test - 3 (Commerce) - Question 3

A manufacturing enterprise monthly consumes 1,350 units of raw material at the cost of Rs. 20 per unit. Determine its economic order quantity given the ordering cost of Rs. 2,400 and carrying cost of inventory being 30 percent of the price paid.

Detailed Solution for TS SET Paper 2 Mock Test - 3 (Commerce) - Question 3

Option1 is correct.

Key-Points

Monthly Demand = 1,350 units (Given)

Annual demand = 1350 x 12=16200 (monthly units x 12)

Ordering Cost = 2400 (given)

Price paid = Rs. 20 per unit.

Carrying Cost = 30% x 20 = 0.03 x 20 = 6  (As carrying cost of inventory being 30 percent of the price paid)

where:

  • AR– Consumption of the article concerned (in units) during a year;
  • OC = Cost of placing one order including the cost of receiving the goods or ordering cost; and
  • C = Interest payment per unit per year including another variable cost of storing it (carrying cost per unit per annum)

EOQ= 3600 Units

TS SET Paper 2 Mock Test - 3 (Commerce) - Question 4

Match the following:

Detailed Solution for TS SET Paper 2 Mock Test - 3 (Commerce) - Question 4

The correct answer is A-2, B-3, C-4, D-1.

Key Points

Important Points A - Realized Yield Method: This method is used to calculate the cost of equity capital. It takes into account the actual returns earned by investors who have invested in the company's shares, rather than using estimates or assumptions about future returns.

B - Taxation: Taxation is an important consideration in calculating the cost of debt capital. The after-tax cost of debt is used to determine the weighted average cost of capital (WACC) of a company, which takes into account the cost of both equity and debt capital.

C - Cost of total capital employed: The cost of total capital employed is the overall cost of financing a company's operations, which includes both debt and equity capital. This cost is used to determine the company's WACC.

D - Dividend Growth is a consideration: The growth rate of dividends is an important consideration in calculating the cost of equity capital. The cost of equity is the return required by investors to invest in the company's shares, and it is based on the expected future dividends and the growth rate of those dividends.

In summary, the matching is as follows:

A matches with 2 because the Realized Yield Method is used to calculate the cost of equity capital.
B matches with 3 because taxation is an important consideration in calculating the cost of debt capital.
C matches with 4 because the cost of total capital employed is used to determine the company's WACC.
D matches with 1 because the growth rate of dividends is an important consideration in calculating the cost of equity share capital.

TS SET Paper 2 Mock Test - 3 (Commerce) - Question 5
Which of the following statements is false?
Detailed Solution for TS SET Paper 2 Mock Test - 3 (Commerce) - Question 5

Nationalisation of commercial banks has achieved its objectives is false because the nationalisation of commercial banks has not achieved its objectives yet.

The major objectives of nationalisation were: Increase in efficiency, better management, better service condition, check of undesirable activities, utilisation of savings for productive purposes, to meet the legitimate credit needs of private sector industry and trade, to foster the growth of the new and progressive entrepreneurs, to reduce the regional and sectoral imbalance in banking, etc. It has not achieved some of its objectives, i.e. deterioration in customer service, political interference, social banking inadequate, the window dressing of balance sheet and large scale irregularities.

TS SET Paper 2 Mock Test - 3 (Commerce) - Question 6

Which of the following can be inferred from below statement?
‘Given the complexity of the legacy taxes that GST subsumed and replaced and the teething troubles of operating a new tax system, ensuring optimal outcomes has proved an abiding challenge’?

Detailed Solution for TS SET Paper 2 Mock Test - 3 (Commerce) - Question 6

As per the passage, any new law when implemented, is bound to have issues at first with the enforcing authority facing obstacles in implementation and have to make sure that the law provides the intended outcome or results, which takes time.

The statement talks about how GST is an umbrella comprised of several laws and it has to overcome obstacles to ensure the best results which is an ‘abiding challenge’ i.e. a challenge which will prevail for a long period of time.

TS SET Paper 2 Mock Test - 3 (Commerce) - Question 7

Why has the GST legislation and its successful implementation become a challenge?

Detailed Solution for TS SET Paper 2 Mock Test - 3 (Commerce) - Question 7

According to the passage, ‘A significant concern relates to the loopholes that unscrupulous operators have sought to exploit, whereby revenue that ought to have accrued to the Centre and the States has leaked while allowing these elements to derive illicit profits.’

TS SET Paper 2 Mock Test - 3 (Commerce) - Question 8

Identify the correct statement from the following.

Detailed Solution for TS SET Paper 2 Mock Test - 3 (Commerce) - Question 8
Life insurance in its modern form came to India from England in the year 1818. Oriental Life Insurance Company started by Europeans in Calcutta was the first life insurance company on Indian soil. Initially, insurance companies used to discriminate Indian and European clients. Indian lives were being treated as sub-standard lives and heavy extra premiums were being charged upon them.
TS SET Paper 2 Mock Test - 3 (Commerce) - Question 9
The cost incurred in the normal run of the business is called as _______.
Detailed Solution for TS SET Paper 2 Mock Test - 3 (Commerce) - Question 9

The correct answer is Explicit

Key Points

  • Explicit costs are normal business costs that appear in the general business and directly affect a company's profitability.
  • Explicit costs have clearly defined amounts, which flow through to the income statement.
  • Examples of explicit costs include wages, lease payments, utilities, raw materials, and other direct costs.
  • Explicit costs are also known as accounting costs.
  • They are easy to identify and link to a company's business activities to which the expenses are attributed.
TS SET Paper 2 Mock Test - 3 (Commerce) - Question 10

SUGAM is also know as

Detailed Solution for TS SET Paper 2 Mock Test - 3 (Commerce) - Question 10

SUGAM is also known as ITR-4.
Key Points

Explanation:

  1. Income Tax Return Form 4, which also called SUGAM, is filed by the taxpayers who have opted for presumptive taxation scheme under section 44AD, section 44Dand section 44AE of the Income Tax Act, 1961.
  2. ITR 4 can be filed by individuals, HUF as well as a partnership firm. However, if the annual turnover of business registered under presumptive taxation scheme exceeds Rs. 2 crores, the taxpayer is required to file ITR-3.
TS SET Paper 2 Mock Test - 3 (Commerce) - Question 11

Which one among the following statement is true in the context of the testing of hypothesis ?

Detailed Solution for TS SET Paper 2 Mock Test - 3 (Commerce) - Question 11

Key Points

  • A hypothesis is a tentative assumption made in order to draw out and test its logical or empirical consequences.
  • Hypothesis testing is used to assess the credibility of a hypothesis by using sample data.

Important Points
Writing a hypothesis is essentially making an educated assumption based on evidence and scientific prejudices that is then confirmed or refuted through the scientific method.

Types of Hypothesis:

  1. Null Hypothesis: A null hypothesis states that there is no association between two variables. H0 indicates a negative statement, such as "Athletes' on-field performance is not affected by attending physiotherapy sessions," which asserts that there is no connection between physiotherapy sessions and on-field performances. Even then, it would just be a coincidence.
  2. Alternative Hypothesis: A null hypothesis is designated as H0, whereas an alternative hypothesis is designated as H1 or Ha. It is stated clearly that the independent variable is influenced by the dependent variable. A good example of a competing hypothesis is that "athletes perform better on the field when they attend physiotherapy treatments."

  • From the above figure, it can be said that it is the null hypothesis which is being tested.
  • Rejecting the null hypothesis, means accepting an alternative hypothesis, which means there is significant relationship between the variables.
  • Accepting the null hypothesis means there is no significant relationship between the variables.

Hence, it can be concluded that while testing a hypothesis, it is only the null hypothesis which is being tested for drawing the conclusion.

TS SET Paper 2 Mock Test - 3 (Commerce) - Question 12

Which of the following relationship is true?

Detailed Solution for TS SET Paper 2 Mock Test - 3 (Commerce) - Question 12

BCR = PVB ÷ Initial Outlay 

PVB: Present Value of Benefits 

So, Net BCR (NBCR) = BCR – 1

TS SET Paper 2 Mock Test - 3 (Commerce) - Question 13
Which of the following modes indicates a strategic alliance in international business?
Detailed Solution for TS SET Paper 2 Mock Test - 3 (Commerce) - Question 13
Joint ventures involves strategic alliances. The reasons for these alliances may be complementary capabilities and resources such as distribution channels, technology or finance.
TS SET Paper 2 Mock Test - 3 (Commerce) - Question 14

Assertion (A): Weighted average cost of capital should be used as a hurdle rate for accepting or rejecting a capital budgeting proposal.

Reason (R): It is because by financing in the proportions specified and accepting the project, yielding more than the weighted average required return, the firm is able to increase the market price of its stock.

Detailed Solution for TS SET Paper 2 Mock Test - 3 (Commerce) - Question 14

Capital budgeting is a process used to determine whether an organization's long-term investments are worth the funding of cash through the firm's capitalization structure. It is a method of estimating the financial ability of capital investment over the lifespan of the investment.

Key Points

Weighted Average Cost of Capital (WACC):

  • WACC is referred to as a company's cost of capital.
  • When each category of cost of capital employed is calculated proportionately then it is known as the Weighted Average Cost of Capital.
  • The purpose of WACC is to the determine cost of capital structure based on the proportion of debt, equity, and preference stock it has.
  • The company pays interest on its debts, a fixed yield on its preferred stock, and give a dividend to its equity holders.
  • WACC is used as a hurdle rate in order to accept or reject a capital budgeting proposal.
  • After accepting the proposal using this method, financing activities take place in the proportions specified, which leads to yield more returns on the basis of the cost spent on that project, which ultimately helps the firm to see an increase in the market price of its stock.

Therefore, both Assertion and Reason are true, and also Reason is the correct explanation of Assertion.

Important Point

WACC Formula:

WACC = (E/V x Re) + [(D/V x Rd) x (1 - T)]

Where,

  1. E = market value of firm's equity,
  2. D = market value of firm's debt,
  3. V = total value of capital,
  4. E/V = percentage of capital that is equity,
  5. D/V = percentage of capital that is debt,
  6. Re = cost of equity,
  7. Rd = cost of debt,
  8. T = tax rate.
TS SET Paper 2 Mock Test - 3 (Commerce) - Question 15
In Queuing Theory, statistical pattern by which customers arrive over a period of time, follows
Detailed Solution for TS SET Paper 2 Mock Test - 3 (Commerce) - Question 15

The correct option is the Poisson distribution

Key Points Queuing Theory

Queuing theory is a branch of operation research that studies the movement of people, objects, or information through a line.

Important Points

  • The analytical modeling of a queue would involve providing an input specification describing the queue
  • The arrival describes the way the customer enter the system
  • Poisson distribution is a discrete probability distribution that expresses the probability of the given number of an event occurring in fixed intervals.
  • The arrival pattern can be expressed as

P ( X ) = λ x e − λ X ! μ

  • The inter-arrival follows the exponential distribution
Hence the correct answer is In Queuing Theory, the statistical pattern by which customers arrive over a period of time follows Poisson distribution.

TS SET Paper 2 Mock Test - 3 (Commerce) - Question 16
A manager thinks that men perform better in oral presentation than women. What type of bias is being followed in this case? 
Detailed Solution for TS SET Paper 2 Mock Test - 3 (Commerce) - Question 16

The correct answer is Stereotyping.

Key Points

  • The type of bias being followed in this case is gender stereotyping.
  • Gender stereotyping is a type of bias that occurs when an individual or a group of people hold stereotypes or prejudices about one gender or another.
  • It can manifest in different ways, including making assumptions or judgments based on gender, attributing certain qualities or characteristics to one gender, or treating individuals differently based on their gender.
  • In this case, the manager is making a biased assumption that men perform better than women in oral presentations.
  • This assumption is not based on any objective evidence or data, but rather on a biased belief or stereotype about gender.
  • This type of bias can have negative consequences, including limiting opportunities for women to excel in certain areas and perpetuating gender inequality.
  • To overcome gender bias, it is important to challenge and question assumptions about gender, promote diversity and inclusion, and provide equal opportunities and resources for individuals of all genders to succeed.

Additional Information Halo Effect- The Halo Effect is a cognitive bias that occurs when our overall impression of a person, product, or company influences our judgment of their specific traits or characteristics. In other words, it is the tendency to let our positive or negative general impression of something or someone influence our evaluations or judgments of specific attributes or aspects.

Projection Effect- Projection effect is a cognitive bias that occurs when people unconsciously project their own personality traits, beliefs, or attitudes onto others. In other words, people may assume that others share their own values, beliefs, and attitudes, even when this is not the case.

Contrast effect- The Contrast Effect is a cognitive bias that occurs when the perception of an object or individual is influenced by the presence or characteristics of other objects or individuals encountered before it. In other words, our judgment of something can be distorted by the context in which it is presented.

Hence, the correct answer is Stereotyping.

TS SET Paper 2 Mock Test - 3 (Commerce) - Question 17

Match List-I with List-II.

Detailed Solution for TS SET Paper 2 Mock Test - 3 (Commerce) - Question 17

The correct match is a-i, b-ii, c-iii, d-iv.

EDI (Electronic Data Interchange) system was started by the Directorate General of Foreign Trade to simplify the documentation related activities.

AEO (Authorized Economic Operator) has been developed by Indian customs to secure the supply chain from point of export to import and to reduce dwell time and related costs.

TRS (Time Release Study) has been undertaken by the Customs Authority of India to identify the bottlenecks in the international supply chain and to establish a baseline for trade facilitation.

TEE (Towns of Export Excellence) program was started to develop the export production centers and new industrial clusters.

Hence, the correct option (A).

TS SET Paper 2 Mock Test - 3 (Commerce) - Question 18

Anil retired from XYZ Ltd. after 28 years of service and received a gratuity of Rs.12 lakh. His last drawn salary (basic + DA) was Rs. 1,00,000 per month. If Anil is not covered by the Payment of Gratuity Act, 1972, the exemption under sec 10(10) in respect of gratuity is:

Detailed Solution for TS SET Paper 2 Mock Test - 3 (Commerce) - Question 18

Key Points
Gratuity is payable to an employee when an employee leaves employment after completing at least five years in service with an employer – so this is payable –

  • On superannuation (means an employee who attains the age of retirement is said to be in superannuation)
  • On retirement or resignation
  • On death or disablement due to accident or disease (the time limit of 5 years shall not apply in the case of death or disablement of the employee)
  • Gratuity is not paid as part of your regular monthly salary; it is only payable on the occurrence of any of the above events.

Gratuity Exemption – Section 10(10)

  • If Gratuity is received by any employee while in employment then it is fully taxable in the hands of employee. While if gratuity is received in case of death or retirement or resignation, then exemption is available up to the following limits.

In Case of Government Employee

  • Any gratuity received by an employee of Central Government, State Government or local authority is wholly exempt from tax. This exemption is not available to employees of Statutory Corporation.

In Case of Employees Covered by Payment of Gratuity Act:

An amount equal to the least of the following will be exempt from tax:

  • 15/26 x Salary last drawn x No. Of completed years of service or part thereof in excess of 6 months.
  • ₹ 20,00,000 (which has been hiked from Rs. 10 Lakh as per the amendment)
  • Gratuity actually received

In case of employees Not Covered Under the Payment of Gratuity Act:

An amount equal to the least of the following will be exempt from tax

  • ½ x Average salary of last 10 months preceding the month of retirement x Completed year of service (fraction of a year is ignored)
  • ₹ 20,00,000
  • Gratuity actually received

Important Points

Hence, Anil is not covered by the Payment of Gratuity Act, 1972, the exemption under sec 10(10) in respect of gratuity is least of the following:

  • ½ x Average salary of last 10 months preceding the month of retirement x Completed year of service (fraction of a year is ignored) = 1/2 x 1,00,000 x 28 = 14,00,000.
  • ₹ 20,00,000
  • Gratuity actually received = ₹ 12,00,000.

Hence, the exemption under sec 10(10) in respect of gratuity is 12,00,000.

TS SET Paper 2 Mock Test - 3 (Commerce) - Question 19

Which of the following function is performed by the National Financial Reporting Authority (NFRA), established under the Companies Act, 2013?

Detailed Solution for TS SET Paper 2 Mock Test - 3 (Commerce) - Question 19

The correct answer is ​option 3.

Key Points

  • The National Financial Reporting Authority (NFRA):
    • The National Financial Reporting Authority (NFRA) was constituted in 2018 by the Government of India under Sub Section (1) of section 132 of the Companies Act, 2013.
    • As per the Companies Act, 2013, the duties of the NFRA are to:
      • Recommend accounting and auditing policies and standards to be adopted by companies for approval by the Central Government. Hence, option 3 is correct.
      • Monitor and enforce compliance with accounting standards and auditing standards;
      • Oversee the quality of service of the professions associated with ensuring compliance with such standards and suggest measures for improvement in the quality of service;
      • Perform such other functions and duties as may be necessary or incidental to the aforesaid functions and duties.
TS SET Paper 2 Mock Test - 3 (Commerce) - Question 20
_______ media is very effective at delivering messages to target audiences as it allows for explanation in a way that most other media cannot.
Detailed Solution for TS SET Paper 2 Mock Test - 3 (Commerce) - Question 20

The correct answer is- Print.

Key Points

Print media:

This was once the only means of spreading information to the general people.

  1. For a huge number of people, newspapers are an important source of information. 
  2. Magazines are specialized advertising publications published weekly, monthly, quarterly, or annually. They provide educational information.
  3. Print media is very effective at delivering messages to target audiences, as it allows for explanation in a way that most other media cannot.
  4. They may be in the form of picture or photograph demonstrating how an offer should be used

 Additional Information​ 

   Other types of media:

  Broadcast Media:

  • Traditional media such as television and radio are referred to as broadcast media.
  • Television is one of the most important sources of information. It is one of the most authoritative and important forms of media because it has the ability to reach millions of people. 
  • Radio broadcasts entertainment, information, and instructional programming to the general public via radio waves. Because of its large viewership, this medium is frequently utilized to market products and services.

  Digital  Media:

  • Digital marketing, also known as online marketing, is the promotion of brands through the internet and other forms of digital communication in order to connect with potential customers. As a marketing channel, this includes not only email, social media, and web-based advertising, but also text and multimedia messages.

   Out of Home (OOH) Media: Outdoor advertising, often known as out-of-home (OOH) media, is advertising that appears outside your home.

  • Mall advertising, fitness clubs, cinemas, gas stations/convenience stores, stores, trackside advertising, salon advertising, laundromat advertising, pizza boxes, coffee cups, pharmacy bags, and so on are examples of non-traditional OOH.
  • Billboards, Posters, Buses, Commuter Rail & Subway, Transit Shelters & Street Furniture, Taxis, Airport Media

Hence, the correct answer is- Print is very effective at delivering messages to target audiences, as it allows for explanation in a way that most other media cannot.

TS SET Paper 2 Mock Test - 3 (Commerce) - Question 21

Which of the following will be charged to GST?

(I) Electricity

(II) Sale of Property

(III) Petrol

(IV) Alcohol liquor for human consumption

Detailed Solution for TS SET Paper 2 Mock Test - 3 (Commerce) - Question 21

The correct answer is None

Key PointsAs per Article 279(5) GST on petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel) will be applicable as per the recommendation of GST council.

Alcohol liquor for human consumption, electricity, property are kept outside the purview of GST.

Important Points In India, under the Goods and Services Tax (GST) regime, the following applies to your list:

(I) Electricity: Exempt. Supply of electricity falls under Schedule III of the CGST Act, meaning it is exempted from GST.

(II) Sale of Property: Not applicable. GST applies to the supply of goods and services. Sale of property, whether commercial or residential, is considered a transfer of immovable property and not a supply of goods or services. Therefore, it does not attract GST.

(III) Petrol: Included in negative list. Petrol is one of the items listed in Schedule III of the CGST Act, making it exempt from GST.

(IV) Alcohol liquor for human consumption: Included in negative list. Similar to petrol, alcohol liquor for human consumption is also listed in Schedule III and is exempt from GST.

Therefore, none of the items listed will be charged to GST in India.

TS SET Paper 2 Mock Test - 3 (Commerce) - Question 22

Under the provisions of the Industries (Development and Regulation) Act, 1951, a license is necessary for:

Detailed Solution for TS SET Paper 2 Mock Test - 3 (Commerce) - Question 22

The Industries (Development and Regulation) Act, 1951 provides the necessary means to the Central Government to implement its industrial policy. A system of licensing is introduced under the Act to regulate planning and future development of new undertaking on sound and balanced lines and maybe deemed expedient in the opinion of the Central Government.

TS SET Paper 2 Mock Test - 3 (Commerce) - Question 23

Which of the following does NOT come under the purview of 'paper taxes'?

Detailed Solution for TS SET Paper 2 Mock Test - 3 (Commerce) - Question 23
tax which carry their significance only on paper and have no significance in terms of revenue yield are called paper taxes.

Taxes like Gift tax, Estate duty, Wealth tax are paper taxes:

Excise duty is a form of tax imposed on goods for their production, licensing, and sale. It is an indirect tax.

Wealth tax:

  • Levied on accumulated wealth or property of every individual.
  • The tax was abolished in the 2016 budget.

Estate duty:

  • It was imposed on the estate of a person which was inherited by him.
  • The rate ranged from 4 to 40% of the value of the estate.
  • It was imposed and collected by the central government but proceeds were passed on to states.
  • It was abolished in March 1985 as the yield was too low.

Gift tax:

  • Imposed in April 1958.
  • Charged and collected every financial year on gifts received during the previous year.
  • Again abolished in 1998 due to low yield.

TS SET Paper 2 Mock Test - 3 (Commerce) - Question 24
Earnings per share of a company is Rs 4, Return on Investment is 20 percent and the return required by shareholder is 16 percent. Assuming Walter valuation model. if the payout ratio is 40 percent. what will be the price per share? 
Detailed Solution for TS SET Paper 2 Mock Test - 3 (Commerce) - Question 24

The correct answer is 28.75.

Key Points 

The price per share of the company using Walter's valuation model is Rs. 28.75.

Walter's valuation model is a method of valuing a company's shares based on the company's earnings per share, return on investment, and the return required by shareholders.

The formula for Walter's valuation model is:

Price per share = (EPS * ROI * R) / (1 - Payout Ratio)
where:

EPS is the earnings per share
ROI is the return on investment
R is the return required by shareholders
Payout Ratio is the percentage of earnings that is paid out as dividends
In this case, the following values are given:

EPS = Rs. 4
ROI = 20%
R = 16%
Payout Ratio = 40%
Substituting these values into the formula, we get:

Price per share = (EPS * ROI * R) / (1 - Payout Ratio)
= (4 * 20 * 16) / (1 - 0.4)
= (640) / (0.6)
= Rs. 28.75
TS SET Paper 2 Mock Test - 3 (Commerce) - Question 25

A _________ letter of credit is a type of financial guarantee, known as a letter of credit.

Detailed Solution for TS SET Paper 2 Mock Test - 3 (Commerce) - Question 25

A transferable letter of credit is a type of financial guarantee, known as a letter of credit, that additionally allows the first beneficiary to transfer some or all of the credit to another party, which creates a secondary beneficiary. The party that initially accepts the transferable letter of credit from the bank is referred to as the first, or primary beneficiary.

TS SET Paper 2 Mock Test - 3 (Commerce) - Question 26

Match the given lists and select the correct code for the answer.

Detailed Solution for TS SET Paper 2 Mock Test - 3 (Commerce) - Question 26

Pure or perfect competition is a theoretical market structure in which all firms sell an identical product (the product is a "commodity" or "homogeneous"). All firms are price takers (they cannot influence the market price of their products). Market share has no influence on prices.

In Monopolistic Competition, a buyer can get a specific type of product only from one producer. In other words, there is product differentiation. The firms have to incur selling expenses since there is product differentiation. The firm can improve or deteriorate the quality of its products too.

Oligopoly is a market structure in which there are a few firms producing a product. When there are few firms in the market, they may collude to set a price or output level for the market in order to maximize industry profits.

In a monopoly, there is a practice of charging different prices for an identical product is called price discrimination. According to Robinson, “Price discrimination is charging different prices for the same product or the same price for the differentiated product.”s a single seller of a product called a monopolist.

TS SET Paper 2 Mock Test - 3 (Commerce) - Question 27

Financial management is concerned with the:

Detailed Solution for TS SET Paper 2 Mock Test - 3 (Commerce) - Question 27

Financial management is concerned with the procurement of funds and their effective utilisation so that unnecessary usage of funds can be avoided. Financial management optimises the output from the given input of funds and attempts to use the funds in the most productive manner.

TS SET Paper 2 Mock Test - 3 (Commerce) - Question 28

Budgetary control helps in the implementation of:

Detailed Solution for TS SET Paper 2 Mock Test - 3 (Commerce) - Question 28
A standard costing system involves estimating the required costs of a production process. Standard costs are estimates of the actual costs in a company's production process because actual costs cannot be known in advance. This helps a business to plan a budget.
TS SET Paper 2 Mock Test - 3 (Commerce) - Question 29

If the mode of the above distribution is 48.6, then the missing frequency will be

Detailed Solution for TS SET Paper 2 Mock Test - 3 (Commerce) - Question 29

The Correct Answer is 26

Key PointsSteps to calculate missing frequency 

  • Step 1 - Determine class in which mode lies - As mode given in the question is 48.6, the class in which mode lies is 40-55.
  • Step 2 - Find the value of Z,l,h,f0,f1,f2  -
  • Z is the value of mode i.e. 48.6
  • l is the lower class limit of modal class 40-55 i.e. 40
  • h is the class interval of modal class. Class interval = Upper class limit - Lower class limit i.e. 55-40 = 15
  • f0 is the frequency preceding the modal class i.e. 20
  • f1 is the frequency of the modal class i.e. 44
  • f2 is the frequency succeeding the modal class i.e. x.
  • Step 3 - Put the data of step 2 in the formula of mode -
  • Formula of Mode

Z =  

Important Points

Solution:

Z =  ​ 

48.6 = 

48.6 - 40 = 

8.6(68 - ) = 15 x 24

584.8 - 8.6 = 360

8.6 = 224.8

= 26.1

So the value of missing frequency f2 is 26 (approx.)

TS SET Paper 2 Mock Test - 3 (Commerce) - Question 30

The explicit cost is the ________, which equates the present value of cash inflows with the present value of cash outflows.

Detailed Solution for TS SET Paper 2 Mock Test - 3 (Commerce) - Question 30

The explicit cost is the discount rate, which equates the present value of cash inflows with the present value of cash outflows.

Cost of Capital refers to required returns mandatory to make a capital budgeting project. It is a minimum rate of return that an organization must earn before generating value.

There are 5 types of Cost of Capital:

  1. Explicit Cost of Capital
  2. Implicit Cost of Capital
  3. Specific Cost of Capital
  4. Weighted Average Cost of Capital
  5. Marginal Cost of Capital

Hence, the correct option (B).

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