All MCQs

18. An expected dividend yield is 5.5% and expected rate of return is 11.5% then constant growth rate would be

A) 2.09%

B) -6.00%

C) 17.50%

D) 6.00%

✅ ANSWER: D
Constant growth rate = Expected rate of return – Expected dividend yield
= 11.5% – 5.5% = 6.00%

15. When output of earlier process is transferred at a profit to the subsequent process, it is ________.

A) inter departmental profit

B) abnormal gain

C) inter process profit

D) manufacturing profit

✅ ANSWER: C
When output of earlier process is transferred at a profit to the subsequent process, it is inter process profit. The profit associated with the transfer of goods from one process to another process is called inter-process profit.

12. Consumer’s surplus left with the consumer under price discrimination is

A) Maximum

B) Minimum

C) Zero

D) Not predictable

✅ ANSWER: C
Consumer’s surplus left with the consumer under price discrimination is Zero.

7. If an agent is found guilty of criminal misappropriation the designated person will _ ,_

A) Cancel the license

B) Issue a duplicate license

C) Renew the existing license

D) Take some fees from the agent

✅ ANSWER: A
If an agent is found guilty of criminal misappropriation the designated person will Cancel the license.

4. A bill of exchange is called a ____ by one who is liable to pay it on the due date

A) Bill receivable

B) Noted bill of exchange

C) Bill payable

D) None of the above

✅ ANSWER: C
A bill of exchange is called a Bill payable by one who is liable to pay it on the due date. It is a written, unconditional order by one party (the drawer) to another (the drawee) to pay a certain sum, either immediately (a sight bill) or on a fixed date (a term bill), for payment of goods and/or services received.

1. If direct material cost is $5500 and prime cost is $25000, then direct manufacturing labour would be

A) $19,500

B) $30,500

C) $45,500

D) $22,500

✅ ANSWER: A
Direct manufacturing labour = Prime cost – Direct material cost
= $25000 – $5500 = $19,500

38. In case of ________ layout, production is carried on in special purpose machine.

A) functional

B) product

C) stationary

D) combined

✅ ANSWER: B
In case of product layout, production is carried on in special purpose machine. Since machines are arranged based on the sequence of operations, mechanized equipment such as conveyor belts can be used for transporting materials. This results in significant saving of time.

36. If marginal opportunity cost is falling, the PPF would be

A) Straight line

B) Concave

C) Backward leading

D) Convex

✅ ANSWER: D
If marginal opportunity cost is falling, the PPF would be convex. Pay Per Click curve can be convex to the origin when the opportunity cost decreases. This can happen only when less and less units are foregone of first commodity for the introduction of additional unit of another commodity. Due to increasing marginal opportunity cost. PPC becomes concave to origin.

34. The relationship between potential unsystematic risk and reward is given by ___________.

A) Excess return to beta ratio

B) Excess return to security

C) Excess return to security

D) Excess return to beta square ratio

✅ ANSWER: A
The relationship between potential unsystematic risk and reward is given by excess return to beta ratio. Beta Ratio refers to the efficiency in which a given filter element removes particles of a given size.

3. Endorsement, discounting and collection of bills of exchange is made by

A) Debtors

B) Creditors

C) Drawee

D) Drawer

✅ ANSWER: D
Endorsement, discounting and collection of bills of exchange is made by Drawer. The individual or firm that issues or signs a draft instructing the drawee to pay a specified sum of money to, or to the order of, a named person (payee), or to bearer.