MH SET Paper 2 Mock Test - 8 (Commerce) - MAHA TET MCQ

The financial break-even point is the level of EBIT where the EPS is zero for a particular given financial plan. Indifference point is the point where the EPS will be the same for the given financial plans irrespective of the debt-equity mix. If the expected level of EBIT exceeds the indifference point, then it would be beneficial to use the fixed charge source of funds to increase the EPS i.e. use of levered funds.

Statement I: If the value of , of a distribution gives the value more than 3, its curve is platykurtic.

Explanation:

1. Leptokurtic Curve - Value of β₂ is greater than 3.
2. Mesokurtic Curve - Value of β₂ is equal to 3.
3. Platykurtic Curve - Value of β2 is less than 3.

Thus, Statement I is incorrect.

Statement II: In a moderately asymmetrical distribution, the standard deviation is 1.25 times of mean deviation.

Explanation:

In a moderately asymmetrical distribution (variable occurs at the irregular frequency), the standard deviation is 1.25 times of mean deviation.

This statement is correct.

Therefore, Statement II is correct, but I is incorrect.

The correct answer is 60,000 crore.

Key Points

• An allocation of Rs 60,000 crore has been made to cover 3.8 crore households in 2022-23 under Har Ghar, Nal Se Jal Scheme.
• Finance Minister said that the current coverage of Har Ghar, Nal Se Jal is 8.7 crores.
  • Out of which 5.5 crore households were provided tap water in the last 2 years itself.
• Nirmala Sitharaman also announced an allocation of Rs 48,000 crore for the completion of 80 lakh houses.
  • ​For the identified eligible beneficiaries of PM Awas Yojana, both Rural and Urban, in 2022-23.
• The Central Government will work with the state governments to reduce of time required for all land and construction-related approvals.
• It will also work for promoting affordable housing for the middle class and Economically Weaker Sections (EWS) in urban areas.

Additional Information

• Jal Jeevan Mission (Har Ghar Nal se Jal)
  • Launched in 2019.
  • Aim: To provide every single rural household with functional household tap connections (FHTC) ‘Har Ghar Nal Se Jal’ by 2024.
  • A decentralized approach is implemented at national, state, district levels for specific needs and purposes (Targeted Area approach).
  • The major role played by Paani Samitis and women in mobilizing the population.
  • The Jal Jeevan Mission will be based on a community approach to water and will include extensive Information, Education and communication as a key component of the mission
• Objectives:
  1. Piped water supply
  2. Augmenting existing drinking water resources.
  3. Using technology to treat water and make them portable and safe for drinking.
  4. Greywater treatment and management.
  5. Integration with other water resource management programs like Atal Bhujal Yojana, Swajal Scheme, Swachh Bharat Mission, for better and overall management and conservation of water.

Unity of Command means getting orders/ command from only one supervisor. Fayol has stated “As soon as two superiors impose their authority over the same person or department, uneasiness makes itself felt. Dual command is a perpetual source of conflict.”

The German sociologist Max Weber argued that bureaucracy constitutes the most efficient and rational way in which human activity can be organized and that systematic processes and organized hierarchies are necessary to maintain order, maximize efficiency, and eliminate favouritism.

Taylor's philosophy focused on the belief that making people work as hard as they could was not as efficient as optimizing the way the work was done. In 1909, Taylor published "The Principles of Scientific Management." In this, he proposed that by optimizing and simplifying jobs, productivity would increase.

The OTC Exchange Of India (OTCEI), also known as the Over-the-Counter Exchange of India, is based in Mumbai, Maharashtra. It is India's first exchange for small companies, as well as the first screen-based nationwide stock exchange in India. OTCEI was set up to access high-technology enterprising promoters in raising finance for new product development in a cost-effective manner and to provide a transparent and efficient trading system to investors. It facilitates faster transactions, greater liquidity in the market, and transparency in transactions OTCEI is promoted by the Unit Trust of India, the Industrial Credit and Investment Corporation of India, the Industrial Development Bank of India, the Industrial Finance Corporation of India, and other institutions, and is a recognized stock exchange under the SCR Act.

The correct answer is II, III & IV.

Key PointsFactors II, III, and IV (production policy, firm's goodwill, and supply conditions) can all influence the working capital requirement of a firm.

Market conditions (option I) can also influence working capital requirement, but it is not as directly correlated as the other three factors. For example, a firm may need to keep more inventory or accounts receivable during a recession, but it is also possible to reduce working capital requirement by streamlining operations or negotiating better terms with suppliers and customers.

Overall, the optimal working capital requirement for a firm will vary depending on its industry, size, and specific circumstances. However, understanding the factors that influence working capital requirement can help firms to better manage their cash flow and profitability.

Additional Information II. Production Policy: The firm's production policy can also affect its working capital requirement. For example, a firm that uses just-in-time inventory management will have a lower working capital requirement than a firm that uses a more traditional inventory management system.

III. Firm's Goodwill: A firm's goodwill can also affect its working capital requirement. A firm with good goodwill may be able to negotiate better terms with its suppliers and customers, which can lead to a lower working capital requirement.

IV. Supply Conditions: Supply conditions can also affect the firm's working capital requirement. If the supply of raw materials is tight, the firm may need to keep more inventory to ensure that it has enough materials to produce its products.

NABARD bank took over the entire undertaking of ARDC. In 1975, ARC was renamed as Agriculture Refinance and Development Corporation (ARDC) to give focussed attention to credit offtake, development and promotion of the agricultural sector.
NABARD came into existence on 12 July 1982 by transferring the agricultural credit functions of RBI and refinance functions of the then Agricultural Refinance and Development Corporation (ARDC). 

TIN is issued by the federal government. TAN is to be obtained by all persons who are responsible for deducting tax at source (TDS) or who are required to collect tax at source (TCS).

The correct answer is Managers area rational and objective and suppress the voicing of feeling by others

Key Points The feature that is not covered in Model I is double-loop learning.

Model I is a theory of action that describes how people typically behave in organizations. It is characterized by a number of features, including:

• Control: Model I seeks to control others and the environment.
• Independence: Model I emphasizes independence and self-protection.
• Advocacy: Model I advocates for one's own position, even if it means disregarding the views of others.
• Evaluative inquiry: Model I uses evaluative inquiry, which is a process of gathering information to support one's own position.
• Closed communication: Model I communication is closed and defensive.
• Double-loop learning is a process of learning that goes beyond simply changing one's behavior. It involves questioning the underlying assumptions and values that guide one's behavior. Model I does not explicitly address double-loop learning.

In contrast, Model II is a theory of action that describes how people can behave in organizations to promote double-loop learning. Model II is characterized by a number of features, including:

• Clarifying: Model II clarifies one's own values and assumptions.
• Empathizing: Model II empathizes with the values and assumptions of others.
• Testing for understanding: Model II tests for understanding by asking for feedback from others.
• Joint problem-solving: Model II engages in joint problem-solving with others.
• Open communication: Model II communication is open and collaborative.

Model II is a more effective way of behaving in organizations because it promotes double-loop learning. Double-loop learning allows people to change their behavior in a way that is aligned with their values and assumptions. This can lead to more effective and sustainable change in organizations.

The correct answer is option 1.

Concept:

​Copyright Infringement:

The unauthorized use of someone else's copyrighted work is called copyright infringement. As a result, it is the unauthorized use of another person's copyrighted work, infringing on the copyright holder's rights to reproduce, distribute, exhibit, or perform the protected work.

Explanation:

Consider the following real-life example. 

If a person uses someone’s song as background music in his/her music video then could be an act a person is an example of copyright infringement. 

• Copyright infringement occurs when a third party infringes on the copyright holder's rights, such as the exclusive use of a work for a specified period of time.
• Music and movies are two of the most well-known kinds of entertainment that are subjected to substantial copyright violations. Infringement lawsuits may result in contingent liabilities, or funds set aside in the event of a lawsuit.

Hence the correct answer is Copyright Infringement.

Additional Information

• Hacking is the act of unauthorized access to a computer, computer network, or any digital system. Hackers usually have the technical expertise in hardware and software.
• Identity thieves increasingly use personal information stolen from computers or computer networks, to commit fraud by using the data gained unlawfully.
• Cyberbullying is bullying with the use of digital technologies. It can take place on social media, messaging platforms, gaming platforms, and mobile phones.

Section 10AA – Special provisions in respect of newly established Units in Special Economic Zones.

The benefit in respect of newly established Industrial Undertaking in SEZ is Available to all Assessees on Export of Certain Articles or things or software.

Subject to the following Conditions:

1. Begin its production, etc. on or after 01-04-2006 relevant to AY 2006-07 but before 01.04.2021.
2. Should not be formed by splitting up or reconstruction of the unit already in existence.
3. Should not be formed by transferring machinery or plant previously used. In certain conditions as specified in the Act second-hand machinery is allowed.
4. The report in Form No.56Fv.

Uncommuted pension: The term "uncommuted pension" refers to a pension that is paid on a regular basis. The pension may be received monthly, quarterly or yearly.

In psychological research, we seek to determine the relationship between two variables for forecasting purposes.

The correlation r measures the strength of the linear relationship between two quantitative variables. 

Pearson

r is always a number between -1 and 1. So, 1.20 does not lie in this range. r > 0 indicates a positive association. r < 0 indicates a negative association. Values of r near 0 indicate a very weak linear relationship. The strength of the linear relationship increases as r moves away from 0 toward -1 or 1. The extreme values r = -1 and r = 1 occur only in the case of a perfect linear relationship.

Since -0.98 is close to -1 as compared between 0.90 and 1 therefore, -0.98 coefficients of correlation indicate the strongest relationship between two sets of variables.

It provides management with data and decision stands incorrect with respect to the nature of management accounting.

Management accounting is a specialized branch of accounting that helps management in decision-making by supplying relevant accounting information.

This is an accounting branch that records various financial and statistical data and presents this data in form of reports to the internal management for better decision making. This is a form of the service function.

The correct answer is It is not dependent on both the change of scale and change of origin.

Key Points

• Analysis of the co-variation between two or more variables is known as correlation.
• If a change in one variable causes a corresponding change in the other, then the two variables are said to be correlated with each other.
• Coefficient o0f correlation helps in establishing a relation between two values, i.e. one is predicted value and other one is actual value.
• The value of coefficient of correlation always lies between - 1 to +1.
• There are mainly two most famous coefficient of correlation, i.e. Spearman's technique of correlation and Pearson's technique of correlation.
• We choose the spearman technique at the time of calculating the correlation coefficient for ordinal data.
• We choose Pearson's technique when calculating the correlation coefficient for interval data or ratio type data.
• Karl Pearson's coefficient of correlation is also known as Pearsonian coefficient of correlation.

Properties of Correlation Coefficient are as follows:

• The coefficient of correlation is independent of both change in origin as well as change in scale.
• There is symmetric degree of relationship between two variables, i.e. rxy = ryx.
• Value of coefficient of correlation lies between minus 1 to plus 1, not more than that.
• Correlation coefficient is a geometric mean of two regression coefficient.

Hence, the correct answer is It is not dependent on both the change of scale and change of origin.

The correct option is  Inflation.

Key Points As per the passage:

• Implied within "It aids in striking a balance between the government's income and expenditure...contributing to its stability and growth."

• If a government is consistently spending more than its income, it could lead to economic instability manifesting as inflation, among other consequences.

• Which of these is a primary source of income mentioned in the revenue budget?

The correct answer is (B), (C), (D) (E)only.

Key Points The design of a questionnaire will depend on whether the researcher wishes to collect exploratory information (i.e. qualitative information for the purposes of better understanding or the generation of hypotheses on a subject) or quantitative information (to test specific hypotheses that have previously been generated).

•  A well-designed questionnaire should meet the research objectives. This may seem obvious, but many research surveys omit important aspects due to inadequate preparatory work, and do not adequately probe particular issues due to poor understanding.
• To a certain degree some of this is inevitable. Every survey is bound to leave some questions unanswered and provide a need for further research but the objective of good questionnaire design is to 'minimise' these problems.
•  It should obtain the most complete and accurate information possible. The questionnaire designer needs to ensure that respondents fully understand the questions and are not likely to refuse to answer, lie to the interviewer or try to conceal their attitudes.
• A good questionnaire is organised and worded to encourage respondents to provide accurate, unbiased and complete information.
• A well-designed questionnaire should make it easy for respondents to give the necessary information and for the interviewer to record the answer, and it should be arranged so that sound analysis and interpretation are possible.
• It would keep the interview brief and to the point and be so arranged that the respondent(s) remain interested throughout the interview.

Hence, the correct answer is (B), (C), (D). (E) only.

The Union Cabinet has approved a new Consumer Protection Bill 2015 that seeks to replace a 29-years old law and proposes to set up a regulatory authority which will have powers to recall products and initiate a class suit against defaulting companies, including e-tailers (a retailer selling goods via electronic transactions on the Internet). The new bill provides for a comprehensive framework for the protection of consumer interest and will replace the Consumer Protection Act, 1986. The decision comes against the backdrop of emergence of complex products and services in the era of growing e-commerce business in India that has rendered consumers vulnerable to new forms of unfair trade and unethical business practices. The key features of the new bill include the establishment of an executive agency 'Central Consumer Protection Authority' (CCPA) which will protect and enforce the rights of consumers. The authority will intervene when necessary to prevent consumer detriment arising from unfair trade practices and to initiate class-action including enforcing recall, refund, and return of products. That apart, the bill has provisions for "product liability" if product/services cause personal injury, death, or property damage and will take action against defaulting manufacturers or service providers.

`Option (A) is correct since it is mentioned in the passage that around 99.3% currency has come back into the banking system after the demonetization. This proves that the demonetization drive has failed completely in India. Refer to, “The Reserve Bank of India’s annual report for 2017-18 reveals that 99.3% of currency notes that were demonetised at midnight on November 8, 2016 have returned to the banking system. This is only marginally higher than its provisional estimate last year that over 99% — or Rs 15.28 lakh crore worth of the old Rs 500 and Rs 1,000 notes — out of the Rs 15.44 lakh crore that were in circulation at the time had been deposited by June 30, 2017.”

Option (B) is also correct since the RBI is now facing the same issue of counterfeiting the currencies of Rs 500 and Rs 2000 newly launched by the RBI. This has been reported in the annual report of the RBI. Refer to, “Nevertheless, the RBI report, which points to a spurt in counterfeiting of the new Rs 500 and Rs 2,000 notes, raises the old question all over again.”

Option (C) is not correct since there is no reference in the passage that the law and order implementing agencies are too excited regarding arresting the offenders. This is completely irrelevant in the context of the information given in the passage.

Refer to, “Even as these issues are sorted out, the larger lesson must be heeded: sudden shocks to the economy don’t always yield intended policy objectives.“

The summary of the passage is that the government may think that any sudden decision may yield intended policy objectives but it is not always true and it may also be the case that such policy decisions will affect the health of the economy more than contributing to its growth.

Among the given options, option (D) is the correct choice since it perfectly captures the essence of the passage and other options are not relevant as per the information given in the passage.

The correct answer is Both Statement l and Statement II are correct

Important PointsStatement l: Patents are defined as monopoly rights which one granted by the government, for full disclosure of invention for a limited period of time, that is for 20 years

Explanation:

• A patent is an exclusive right awarded for an invention is a product or a technique that, in general, gives a new way of doing something or provides a new technical solution to a problem.
• The protection is granted for a limited period, generally 20 years from the filing date of the application.
• Hence, Statement I is true.

Statement II: The purpose of granting patents is to encourage inventions by promoting their protection and utilization so as to contribute to the development of Industries.

Explanation:

• The purpose of granting patents itself is to not only encourage innovation but also ensure that the inventions are worked in India and are made available to the public in sufficient quantity at reasonable prices.
• Hence, Statement II is true.

Key Points

Depreciation:

• Depreciation is a concept used to write off the cost of an asset over the course of its usable life.
• An entity using depreciable assets must deduct depreciation from its profits and losses, and the Act permits this to be done either using the Straight-Line technique or the Written Down Value (WDV) approach.

Intangible Assets:

• An identified non-financial asset without physical substance that can provide financial benefits to the commercial company is referred to as an intangible asset.
• Goodwill, know-how, customer lists, copyrights, and other intangible assets (including intellectual properties) may be self-generated and thus off-balance sheet items or they may be purchased.

Important Points

• Depreciation should be determined at the prescribed percentage on the WDV (Written Down Value) of the asset, which is calculated with reference to the real cost of the assets, in accordance with Section 32(1) of the IT Act.

Depreciation rates on Intangible Assets as per Income Tax rate are as follows:

• Franchise, trademark, patents, license, copyright, know-how or other commercial or business rights of similar nature = 25%

Hence, it can be concluded that Depreciation allowed on Intangible Assets (know-how, patents, copy rights, trademarks) is 25%.

Additional Information Depreciation Rates as per Income Tax Act for Most Commonly Used Assets:

Marginal costing is useful in profit planning, it is helpful to determine profitability at a different level of production and sale.

Marginal costing is useful in decision making about fixation of the selling price, export decision, and make or buy decision.

Break-even analysis and P/V ratio are useful techniques of marginal costing.