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Economics Questions Answers

Q91 :

Which of the following is not an approach to the Capital Structure?

A
  

Gross Profit Approach

B
  

Net Operating Income Approach

C
  

Net Income Approach

D
  

Modigliani and Miller Approach

View Answer
Correct Answer: A

Gross Profit Approach

No Description Available
Q92 :

Which one of the following methods of Capital Budgeting assumes that cash-inflows are reinvested at the project's rate of return?

A
  

Net Present Value

B
  

Accounting Rate of Return

C
  

Internal Rate of Return

D
  

Discounted Pay Back Period

View Answer
Correct Answer: C

Internal Rate of Return

No Description Available
Q93 :

Cost of Equity Share Capital is more than cost of Debt because :

A
  

Equity shares are not easily saleable

B
  

Equity shares do not provide the fixed dividend rate

C
  

Generally the face value of equity shares is less than the face value of debentures

D
  

Equity shares have high risk than debts

View Answer
Correct Answer: D

Equity shares have high risk than debts

No Description Available
Q94 :

Negative Net Working Capital implies that :

A
  

Long-term funds have been used for fixed assets

B
  

Short-term funds have been used for fixed assets

C
  

Long-tern funds have been used for current assets

D
  

Short-term funds have been used for current assets

View Answer
Correct Answer: B

Short-term funds have been used for fixed assets

No Description Available
Q95 :

Which of the following is an implicit cost of increasing proportion of debt of a company?

A
  

P.E. Ratio of the company would increase

B
  

Rate of return of the company would decrease

C
  

Tax-shield would not be available on new debts

D
  

Equity shareholders would demand higher return

View Answer
Correct Answer: D

Equity shareholders would demand higher return

No Description Available
Q96 :

Profitability Index of a Project is the ratio of present value of cash inflows to:

A
  

Total cash inflows

B
  

Total cash outflows

C
  

Present value of cash outflows

D
  

Initial cost minus Depreciation

View Answer
Correct Answer: C

Present value of cash outflows

No Description Available
Q97 :

Which one of the following statements is false?

A
  

Effective dividend policy is an important tool to achieve the goal of wealth maximisation

B
  

According to Walter, the optimal payout ratio for a growth firm is 100%

C
  

MM model asserts that the value of the firm is not affected whether the firm pays dividend or not

D
  

'Bird-in-the-hand theory' in reference to dividend decision has been developed by Myron Gordon

View Answer
Correct Answer: B

According to Walter, the optimal payout ratio for a growth firm is 100%

No Description Available
Q98 :

Which one of the following statements defines the correct meaning of the term 'boundary spanning'?

A
  

It refers to an obligation of an individual, firm or institution to account for its activities and accept responsibility for them

B
  

It refers to the process that helps the organization and its employees to link with their external environment through specific activities/functions

C
  

It refers to the science of morals, principles and rules of conduct

D
  

It refers to multiculturism management

View Answer
Correct Answer: B

It refers to the process that helps the organization and its employees to link with their external environment through specific activities/functions

No Description Available
Q99 :

The VRIO framework, used in HR function in today's era, refers to four criteria. Identify the correct code which stands as correct explanation to VRIO as proposed by Barney.

A
  

Valence → Recruiting → Industrial relations → Opportunities

B
  

Vision → Rewards → Improvements → Options

C
  

Value → Rarity → lmitabilily → Organization

D
  

Versatile → Resource → Information → Outsourcing

View Answer
Correct Answer: C

Value → Rarity → lmitabilily → Organization

No Description Available
Q100 :

Assertion (A) : Induction is an informal information sharing session on miscellaneous issues in an organization.
Reasoning (R) : The rationale of induction is to ensure effective integration of staff into or across the organization for their mutual benefit.

A
  

Assertion (A) and Reasoning (R) both are correct and (R) is correct explanation of (A)

B
  

Assertion (A) and Reasoning (R) both are correct but (R) is not the correct explanation of (A)

C
  

Assertion (A) is correct statement but Reasoning (R) is an incorrect statement

D
  

Assertion (A) is an incorrect statement but Reasoning (R) is a correct statement

View Answer
Correct Answer: D

Assertion (A) is an incorrect statement but Reasoning (R) is a correct statement

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