Author name: Administrator

778. In a machine dominated industry which method of overhead absorption is suitable?

Direct material cost method
Prime cost method
Labour hour method
Machine hour method
✅ The correct answer is D.
In a machine dominated industry Machine hour method of overhead absorption is suitable. Under this method, hourly rate of depreciation is calculated. The cost of the asset (less residual value if any) is divided by the estimated working hours. The actual depreciate for any given period depends upon the working hours during that year.

779. Mahesh has brought a life insurance policy with a critical illness rider. He has made absolute assignment of the policy in favor of khan. Mahesh suffers a heart attack and there is a claim of Rs.50,000 under the critical illness rider. To whom will the payment be made in this case?

Mahesh
Karan
The payment will be shared equally by Mahesh and Karan
Neither of the two because Mahesh has suffered the heart attack but the policy is assigned in the favor of Karan
✅ The correct answer is B.
Mahesh has brought a life insurance policy with a critical illness rider. He has made absolute assignment of the policy in favor of khan. Mahesh suffers a heart attack and there is a claim of Rs.50,000 under the critical illness rider. The payment be made to Karan in this case.

760. While calculating the weighted average cost of capital, market value weights are preferred because ____________.

Book value weights are historical in nature
This is in conformity with the definition of cost of capital as the investors minimum required rate of return
Book value weights fluctuate violently
Market value weights are fairly consistent over a period of time.
✅ The correct answer is A.
While calculating the weighted average cost of capital, market value weights are preferred because Book value weights are historical in nature.

762. Identify the correct statement out of the following ones.

In emergencies insurer may waive preauthorisation for entering into a hospital for treatment
In all cases preauthorisation either by the insurer or TPA is a must before getting admitted into a hospital
There is no provision for nomination in a health insurance cover
Summary of benefits, terms and conditions for each product in a health cover is not mandatory
✅ The correct answer is A.
In emergencies insurer may waive preauthorisation for entering into a hospital for treatment.

774. State the incorrect statement of the following ones.

In a term insurance the benefits are fixed throughout the duration
In an MRI the insurance benefit on account of cover will decrease year after year
There is no material difference between a term insurance policy and an MRI as far as benefits are concerned
MRI is suitable for a loan sought from a bank as a mortgage cover
✅ The correct answer is C.
There is material difference between a term insurance policy and an MRI as far as benefits are concerned.

755. Notes, mortgages, bonds, stocks, treasury bills and consumer loans are classified as

financial instruments
capital assets
primary assets
competitive instruments
✅ The correct answer is A.
Notes, mortgages, bonds, stocks, treasury bills and consumer loans are classified as financial instruments. Financial instruments are assets that can be traded, or they can also be seen as packages of capital that may be traded. Most types of financial instruments provide efficient flow and transfer of capital all throughout the world’s investors.

759. Centers such as revenue, cost, investment and profit all are known as

marketing center
financial center
responsibility center
planning center
✅ The correct answer is C.
Centers such as revenue, cost, investment and profit all are known as responsibility center. A responsibility center is a functional entity within a business that has its own goals and objectives, dedicated staff, policies and procedures, and financial reports.
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