UGC NET Paper 2: Commerce 17th Oct 2020 Shift 2 (Previous Year Paper)

The Sale of Goods Act, 1930 defines an unpaid seller as a seller that has not been paid the full price of the goods that have been sold or that has received a bill of exchange or other negotiable instruments as conditional payment, and the condition on which it was received has not been fulfilled.

Therefore, the meaning of an unpaid seller is the person who has sold the goods and has not yet received the price.

Features of an unpaid seller:

• The seller must have sold the goods on a cash basis and must be unpaid.
• The seller must be unpaid either wholly or partly.
• The decided period of time has expired and the seller is still left unpaid.
• The seller must not refuse to accept the payment.
• The price is paid through a negotiable instrument i.e. bill of exchange, promissory note, cheque, etc. and the same has been dishonored.

Discount retailers:

• Discount stores are a category of retail stores where retailers sell merchandise at a discounted price.
• Discount store retailers buy merchandise that doesn't have an expiry limit like clothes, shoes, etc. in large quantities from manufacturers to get a massive discount.
• As the discount stores directly buy from the manufacturers, they skip the middlemen's expense so the cost of doing business is reduced too.

Therefore, Discount retailers have comparatively low prices as a major selling point combined with the reduced costs of doing business.

Convenience stores:

• Convenience stores are small local stores that carry limited basic items such as groceries, soft drinks, coffee, snacks, newspapers, magazines, etc.
• They have stable revenue streams because of the nature of their business.
• This means that the convenience store owners would have a certain level of economic stability, even when there are downturns in the economy.

Limited line retailers:

• A retail business has only a single line or a few related lines of products rather than a wide assortment of products.
• They are also known as single-line stores.
• Speciality store, Catalogue stores are an example of limited line retailers.

Category killer stores:

• Category killer is often called a big-box store, is a large retail chain store that effectively "kills" the other stores or products in the same category.
• It specializes in and carries a deep product assortment within a given category and has a massive competitive edge over the other retailers through selection, pricing, and market penetration activities.
• Charlie Lazarus, the founder of Toys R Us, is generally credited with inventing the concept of a category killer.

Direct marketing:

• Direct marketing gives the opportunity of promoting goods and services directly to the customers who need them the most.
• Direct marketing helps in building relationships with new customers.
• All promotional information is relayed without intermediaries and any third parties.
• Emails, newspapers, outdoor advertising, SMS marketing, Tele-marketing, websites, catalog distribution, etc. are various types of direct marketing strategies.

Therefore, Tele-marketing is a part of Direct marketing.

Viral marketing:

• Viral marketing is an advertising strategy that uses social media to generate interest and a potential sale of a brand or product through viral messages in the form of memes, shares, likes, and forwards.
• It refers to how consumers spread information about a product with other people, in the same way, that a virus spreads from one person to another.
• In other words, marketing is considered viral when it reaches a point where it is being shared by the people at large rather than just the target audience.

Social marketing:

• It is a systematic application of marketing activities along with other concepts and techniques to achieve specific behavioral goals for social good.
• Philip Kotler states, "Social marketing seeks to influence social behaviors not to benefit the marketer, but to benefit the target audience and the general society."
• This technique has been used extensively in international health and sanitation programs.
• The main objective of social marketing is to promote the well being of society.

Relationship marketing:

• It is defined as, "Relationship marketing is a strategy designed to foster customer loyalty, interaction and long-term engagement. It is designed to develop strong connections with customers by providing them with information directly suited to their needs and interests and by promoting open communication."
• It refers to the activities undertaken by the organization to maintain loyalty, profitability, and long-term relationship with the customers.

Skimming" in e-banking refers to Identifying fraudsters copying vital information from credit cards

• Skimming is an illegal practice used by identity thieves to capture credit card information from a cardholder surreptitiously.
• Fraudsters often use a device called a skimmer that can be installed at gas pumps or ATM machines to collect card data.
• Some machines act like point-of-sale technology. An acquired card is swiped, and a touchpad allows the user to enter a security code.
• Card users are warned to keep their cards in their sight at all times and to cover the pin pad when inputting security codes at ATMs.

Group norms:

• Every group develops and follows its own beliefs, attitudes, traditions, and expectations for how the things in the group will be done.
• This pattern and expectations of the group are known as Group norms.
• Group norms are nothing but ground rules that encourages group members to work efficiently and discourage behavior that hinders its effectiveness.

Therefore, beliefs, attitudes, traditions, and expectations which are shared by group members are called group norms.

Group communication:

• Group communication refers to the exchange of information and interaction between members of a small group of individuals.
• Groups can consist of family members, work teams, committees, friendship circles, and other such teams.
• In an organization, group communication is a mode of communication between the employers and the employees in teams/groups

Group cohesiveness:

• Group cohesiveness refers to the degree of attachment between the members of the group.
• It is one of the characteristic features of the group which is very significant from the behaviouristic point of view.
• It arises when the bond links members of the social group to one another and to the group as a whole.

Group structure:

• Group structure refers to the rules of the group norms, roles, and status among the members that define and organize the group.
• The group structure is an underlying pattern or layout of the group.
• It is also influenced by the size and degree of group cohesiveness.

Management development is a systematic process of growth and development by which managers develop their abilities to man­age. It is concerned with not only improving the performance of managers but also giving them opportunities for growth and develop­ment.

A large variety of methods of training are used in business. Even within one organization, different methods are used for training different people. All the methods are divided into two classifications:

1. On The Job Training Methods: 

• The On-the-Job Training is a technique wherein the workers, i.e., operative staff, are given direct instructions to perform their jobs on the actual work floor.
• The workers can learn the skills that are required to be performed in the actual work conditions and also get accustomed to the working environment.
• Also, the organizations need not bear any additional cost of setting up a classroom or a simulated setup for imparting training to the workers, away from the actual work floor, as in the case of Off-the-Job training.

2. Off The Job Training Methods: 

• Off-the-Job Training is the training method wherein the workers/employees learn their job roles away from the actual work floor.
• Simply, off-the-job training comprises of a place specifically allotted for the training purpose that may be near to the actual workplace, where the workers are required to learn the skills and get well equipped with the tools and techniques that are to be used at the actual work floor.

Apprenticeship: 

• This type of training is generally given to the people in crafts, trade, and technical fields that require long-term learning before they actually gain proficiency in their respective disciplines.
• This training is a blend of classroom and on-the-job training and is conducted under close supervision.
• This can be extended up to 3 to 4 years as apprentices need to go through the learning process till they become an expert in their fields. E.g. The craftsmen job, mechanic, electrician, plumber, toolmaker, etc. have to undergo this type of training.
• On-the-Job training is based on the principle of “learning by doing”, i.e. the workers learn the job while performing it within the actual work environment.
• This type of training is beneficial for both the workers and the organization.
• Thus, Apprenticeship is NOT a part of the off - the job training method.

Therefore, Option 3 is the correct answer.

1. Sensitivity training is a form of training with the goal of making people more aware of their own goals as well as their prejudices, and more sensitive to others and to the dynamics of group interaction. It is a part of the off-the-job training as it is not directly related to "learning by doing". 2. Transactional Analysis is a training method to develop interactive and communication skills among trainees. Transactional analysis is a means to know why people are as they really are, and also why they say or do things that they actually say or do. When applied to job situations, it provides an understanding of how people relate to each other, and how communication and human relationships between them can be made more effective. It is a part of the off-the-job training as it is not directly related to "learning by doing". 3. A meeting of several people to discuss any subject is called a conference. Each par­ticipant contributes by analyzing and discussing various issues related to the topic. Everyone can express their own viewpoint. It is a part of the off-the-job training as it is not directly related to "learning by doing".

The goodness of fit:

• The goodness of fit test is a statistical hypothesis test to see how well sample data fit a distribution from a population with a normal distribution.
• Put differently, this test shows if your sample data represents the data you would expect to find in the actual population or if it is somehow skewed.
• Goodness-of-fit establishes the discrepancy between the observed values and those that would be expected of the model in a normal distribution case.
• There are multiple methods for determining goodness-of-fit. Some of the most popular methods used in statistics include the chi-square, the Kolmogorov-Smirnov test, the Anderson-Darling test, and the Shapiro-Wilk test.
• Goodness-of-fit tests are often used in business decision making. In order to calculate a chi-square goodness-of-fit, it is necessary to first state the null hypothesis and the alternative hypothesis, choose a significance level (such as α = 0.5) and determine the critical value.

1. The most common goodness-of-fit test is the chi-square test, typically used for discrete distributions.
2. The chi-square test is used exclusively for data put into classes (bins), and it requires a sufficient sample size in order to produce accurate results.
3. Goodness-of-fit tests are commonly used to test for the normality of residuals or to determine whether two samples are gathered from identical distributions.

Thus, option 3 is the correct answer.

1. T-Test: 

• The t-test tells you how significant the differences between groups are; In other words it lets you know if those differences (measured in means) could have happened by chance.
• The t-test is one of many tests used for the purpose of hypothesis testing in statistics. 2. F Test: 
• An F-test is conducted by the researcher on the basis of the F statistic.
• The F statistic is defined as the ratio between the two independent chi-square variates that are divided by their respective degree of freedom.
• The F-test follows the Snedecor’s F- distribution. The F-test is used by a researcher in order to carry out the test for the equality of the two population variances.
• If a researcher wants to test whether or not two independent samples have been drawn from a normal population with the same variability, then he generally employs the F-test.
• The F-test is also used by the researcher to determine whether or not the two independent estimates of the population variances are homogeneous in nature. 3. Z Test: 
• A Z-test is a type of hypothesis test—a way for you to figure out if results from a test are valid or repeatable.
• For example, if someone said they had found a new drug that cures cancer, you would want to be sure it was probably true.
• A hypothesis test will tell you if it’s probably true, or probably not true. A Z test is used when your data is approximately normally distributed (i.e. the data has the shape of a bell curve when you graph it).

Convenience sampling

1. It is defined as a method adopted by researchers where they collect market research data from a conveniently available pool of respondents.
2. It is the most commonly used sampling technique as it’s incredibly prompt, uncomplicated, and economical.
3. In many cases, members are readily approachable to be a part of the sample.
4. Researchers use convenience sampling in situations where additional inputs are not necessary for the principal research. There are no criteria required to be a part of this sample. Thus, it becomes incredibly simplified to include elements in this sample.
5. All components of the population are eligible and dependent on the researcher’s proximity to get involved in the sample.
6. The researcher chooses members merely based on proximity and doesn’t consider whether they represent the entire population or not.
7. Using this technique, they can observe habits, opinions, and viewpoints in the easiest possible manner.

In the question above, the researcher is choosing class friends and neighbors as his sample audience as it is convenient to get a response from them owing to their proximity. Thus, it is an example of Convenience Sampling.

Therefore, option 1 is the correct answer. 

1. Judgement Sampling: 

• Judgmental sampling, also called purposive sampling or authoritative sampling, is a non-probability sampling technique in which the sample members are chosen only on the basis of the researcher’s knowledge and judgment.
• The sample audience is selected with the utmost scrutiny and not as per convenience.

​2. Cluster Sampling**:** 

• Cluster sampling is a probability sampling technique where researchers divide the population into multiple groups (clusters) for research.
• Researchers then select random groups with a simple random or systematic random sampling technique for data collection and data analysis. 3. Stratified Sampling: 
• Stratified sampling is a type of sampling method in which the total population is divided into smaller groups or strata to complete the sampling process.
• The strata are formed based on some common characteristics in the population data.
• After dividing the population into strata, the researcher randomly selects the sample proportionally.

Right offering:

1. A rights offering is when a company issues to its existing shareholders a right to buy additional shares in the company.
2. The company offers its shareholder a specific number of shares at a special price.
3. The company will also set a time limit for the shareholder to buy these shares.
4. The shares are often offered at a discounted price to the existing shareholders.
5. In a rights offering, the subscription price at which each share may be offered is generally at a discount to the current market price.
6. Rights are often transferable, allowing the holder to sell them in the open market.

Number Of Right Shares: 1

Total Shares= Existing + New share = 5+1= 6

Value Of Right = (Number Of Right Shares / Total Shares) x (Market Value - Issue Price)

Value Of Right = (1/6) x (150-120)

∴ Value Of Right = 0.166667 x 30

∴ Value Of Right = Rs. 5

Alternatively,

Market Value Of 5 Existing Holdings = Rs. 150 x 5 = Rs. 750

Add: Issue Price Of 1 New Holding   = Rs. 120 x 1 = Rs. 120

∴ Value Of Total Holdings = 750 + 120 = Rs. 870

Value Of Each Share = 870/6 = Rs. 145

Value Of Right = Market Price - Average Price

Value Of Right = 150 - 145

∴Value Of Right = Rs. 5

Thus, option 1 is the correct answer.

Capital budgeting is the process a business undertakes to evaluate potential major projects or investments. Construction of a new plant or a big investment in an outside venture are examples of projects that would require capital budgeting before they are approved or rejected.

1. As part of capital budgeting, a company might assess a prospective project's lifetime cash inflows and outflows to determine whether the potential returns that would be generated meet a sufficient target benchmark. The capital budgeting process is also known as investment appraisal.

2. The original decision to undertake an investment in a particular foreign country may be determined by a mix of strategic, behavioral, and economic decisions.'

3. The specific project, as well as reinvestment decisions – should be justified by traditional financial analysis.

4. Multinational capital budgeting, like traditional domestic capital budgeting, focuses on the cash inflows and outflows associated with prospective long-term investment projects.

5. Multinational capital budgeting is capital budgeting for a foreign project using the same theoretical framework as domestic capital budgeting.

6. Political risk management comes in the ambit of Multinational capital budgeting.

7. For each project, political risk must be evaluated, because the cash flows can be severely affected by the changes in the political environment.

8. The changes in the government would change the political philosophy thereby leading to a new economic environment.

9. An extreme form of risk is the ‘risk of expropriation’ and repatriation. In the case of expropriation, the projects and the parent’s cash flows tend to change drastically because in this case the funds are blocked in the country of the project.

10. The political stability of a country directly impacts borrowing costs, taxes, and regulation for businesses.

11. Kickbacks and other forms of corruption have serious repercussions for MNCs. For example, Turkey has experienced a number of economic and political setbacks that raised the cost of borrowing for the national government. Corruption allegations, tight lending conditions, and financial volatility within the country made it more challenging for corporate entities to operate there effectively.

Thus, option 4 is the correct answer.

The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year. It tells investors and analysts how a company can maximize the current assets on its balance sheet to satisfy its current debt and other payables.

When the current ratio is 2:1, an equal increase in current assets and current liabilities would decrease the current ratio.

Let us understand this through an example;

Current Assets = Rs.200000 and Current Liabilities = Rs.100000

Current ratio = Current assets/Current liabilities = 200000/100000 = 2:1

Now let us increase the current assets and current liabilities by Rs.100000 and calculate the new current ratio ;

Current ratio = 300000/200000 = 1.5:1.

Thus, option 3 is the correct answer.

The profit-maximizing choice for a perfectly competitive firm will occur at the level of output where marginal revenue is equal to marginal cost, that is, where MR = MC. 

Hence Option2 is correct

Profit maximization is assumed to be the dominant goal of a typical firm. This means selling a quantity of a good or service or fixing a price, where total revenue (TR) is at its greatest above total cost (TC).

Marginal revenue is the additional revenue gained from selling one more unit of output.

Profit is the difference between total revenues and total costs.

The profit-maximizing rule for a perfectly competitive firm is to produce the level of output where marginal revenue equals marginal cost.

Fiscal policy has lost its sheen consequent to the implementation of the GST Laws in India

Fiscal policy, measures employed by governments to stabilize the economy, specifically by manipulating the levels and allocations of taxes and government expenditures.

Goods and Service tax:

• GST, which was publicized as ‘one nation, one tax’ by the government, aims to provide a simplified, single tax regime in line with the tax framework applicable in several major economies across the Globe.
• This single tax has helped streamline various indirect taxes and brought in more efficiencies in the business.
• GST law in India is a comprehensive, multi-stage, destination-based tax that is levied on every value addition.

1. Monetary policy is the macroeconomic policy laid down by the central bank. It involves the management of money supply and interest rate and is the demand side economic policy used by the government of a country to achieve macroeconomic objectives like inflation, consumption, growth, and liquidity.
2. Trade policy defines standards, goals, rules, and regulations that pertain to trade relations between countries. Their aim is to boost the nation's international trade. A country's trade policy includes taxes imposed on imports and export, inspection regulations, and tariffs and quotas.
3. Export-Import Policy or better known as Exim Policy is a set of guidelines and instructions related to the import and export of goods. The Government of India notifies the Exim Policy for a period of five years.

Longitudinal studies:

• A longitudinal study is a research design that involves repeated observations of the same variables i.e. people over a short or long period of time.
• It is a type of observational study, although they can be structured as longitudinal randomized experiments.
• The huge disadvantage of any longitudinal study is the time, as it typically takes a substantial time to collect the data that is required.
• Example: The 1970 British Cohort Study, which has collected data on the lives of 17,000 Brits since their birth in 1970, is one of the most well-known longitudinal studies.

Therefore, Longitudinal studies would be most appropriate to use in order to measure the changed opinions of consumers repeatedly.

Focus group studies:

• The focus group involves a small number of demographically similar individuals.
• It is a form of qualitative research where a group of people is asked about their opinions, beliefs, perceptions, and attitudes towards a product, service, advertisement, idea, concept, or packaging.
• The reaction of this group of people to specific research-posed questions are studied.

Shadowing studies:

• Shadowing is a qualitative research technique that is conducted on a small scale where the researcher acts as an observer.
• There are three types of shadowing:
• Natural - where the researcher only observes the subject for a set period of time without any interference.
• Controlled - where the researcher designs a task and only observes it being carried out.
• Participatory - where the researcher performs the activity being observed to gain a first-hand perspective.

Experimental studies:

• Experimental studies are the ones where the researcher introduces an intervention and then studies the effects.
• It is commonly used in scientific research designs and is the primary approach used to study the causal (cause and effect) relationship and investigate the relationship between one variable and the other.
• It is mostly done in a controlled environment.

The correct answer is - Nil

Key Points

• Transport Allowance
• Earlier, a fixed exemption was available under the Income Tax provisions.
• However, this exemption has been withdrawn for most employees.
• Current Tax Treatment
• The entire amount of transport allowance received (₹1,800 p.m.) is fully taxable.
• No deduction is allowed based on actual expenditure (₹1,400 p.m.).
• Exemption Status
• Since exemption is revoked, the allowable exemption amount is Nil.

Additional Information

• Standard Deduction
• Transport allowance exemption was removed with the introduction of standard deduction.
• This deduction is allowed as a flat amount from salary income.
• Exception Cases
• Exemption is still available for specially-abled employees (subject to prescribed limits).
• Taxability Rule
• Any allowance becomes taxable if no specific exemption is provided under the Income Tax Act.

In probability theory and statistics, the Poisson distribution, named after French mathematician Siméon Denis Poisson, is a discrete probability distribution that expresses the probability of a given number of events occurring in a fixed interval of time or space if these events occur with a known constant mean rate and independently of the time since the last event.

Using the Poisson probability rule, 

P(X = x) = (λ^x.e^-λ) / x!

where, x = 0,1,2,3,...

λ = mean number of occurrences in the interval

e = Euler's constant

Here, λ = 2 customers/minute. Now,

P(3) = (e^-2 x 2³) / 3!

With e-2 = 0.1353, we get

P(3) = (0.1353 x 8) / 6 

∴ P(3) = 0.1804

Thus, option 1 is the correct answer.

Financial Management means planning, organizing, directing, and controlling the financial activities such as procurement and utilization of funds of the enterprise. It means applying general management principles to the financial resources of the enterprise.

Value maximization is the most pervasive and sustaining objectives of financial decision making.

1. Value maximisation is the administrative activity concerned with determining an organization's long-term market value.
2. All of an organization's financial assets, including equity, debt, preference shares, and warrants, make up its overall value.
3. When a company's stock price rises on the market, its overall value rises as well.

Thus, option 3 is the correct answer.

An activity ratio is a type of financial metric that indicates how efficiently a company is leveraging the assets on its balance sheet, to generate revenues and cash. Commonly referred to as efficiency ratios, activity ratios help analysts gauge how a company handles inventory management, which is key to its operational fluidity and overall fiscal health.

Activity Ratio = Capacity Ratio x Efficiency Ratio

Efficiency Ratio = Activity Ratio / Capacity Ratio

∴ Efficiency Ratio = 80 / 120

∴ Efficiency Ratio = 66.67%

Thus, option 4 is the correct answer.

The correct answer is A price ceiling below the equilibrium price often leads to a Shortage of commodity and black marketing.

• When a price ceiling is set below the equilibrium price**, quantity demanded will exceed quantity supplied**, and excess demand or shortages will result. When a price floor is set above the equilibrium price, the quantity supplied will exceed the quantity demanded, and excess supply or surpluses will result.

• The Shortage of the commodity and black marketing economy drives out legitimate industries that can't compete with the lower costs of illegal operations. Some black market players deliberately create shortages in legal goods to force people to purchase from them. The tax-free nature of the black market means the government loses revenue.

• Commodity Glut an excessive quantity i.e. oversupply a glut of the commodity on the market.

• The incidence, or burden, of a tax, falls both on the consumers and producers of the taxed goods. If demand is more inelastic than supply, consumers bear most of the tax burden. But, if supply is more inelastic than demand, sellers bear most of the tax burden.

• Exports are goods and services that are produced in one country and sold to buyers in another. Exports, along with imports, make up international trade.

For a decline in price, Total Revenue (TR) increases if demand is elastic.

Total revenue is price multiplied by quantity demanded (TR = P x Qd).

If demand is elastic at a given price level, then a company should cut its price, the percentage drop in price will result in an even larger percentage increase in the quantity sold—thus raising total revenue.

However, if demand is inelastic at the original quantity level, then the company raises its prices, the percentage increase in price will result in a smaller percentage decrease in the quantity sold—and total revenue will rise.

Zero elasticity refers to the extreme case in which a percentage change in price, no matter how large, results in zero change in quantity. Constant unitary elasticity in either a supply or demand curve refers to a situation where a price change of one percent results in a quantity change of one percent.

A unitary elasticity means that a given percentage change in price leads to an equal percentage change in quantity demanded or supplied.

​​When consumers seek to be different and exclusive by demanding less of a commodity as more people consume it. This phenomenon is known as the Snob effect.

Snob effect 

• It is a phenomenon described in microeconomics as a situation where the demand for a certain good by individuals of a higher income level is inversely related to its demand by those of a lower income level.
• The "snob effect" contrasts most other microeconomic models, in that the demand curve can have a positive slope, rather than the typical negatively sloped demand curve of normal goods.

Bandwagon effect

• The bandwagon effect is when people start doing something because everybody else seems to be doing it.
• The bandwagon effect can be attributed to psychological, social, and economic factors.
• The bandwagon effect originates in politics, where people vote for the candidate who appears to have the most support because they want to be part of the majority.

Substitution effect

• It is the decrease in sales for a product that can be attributed to consumers switching to cheaper alternatives when its price rises.
• A product may lose market share for many reasons, but the substitution effect is purely a reflection of frugality. If a brand raises its price, some consumers will select a cheaper alternative.

Price effect

• It is a concept that looks at the effect of market prices on consumer demand.
• The price effect can be an important analysis for businesses in setting the offering price of their goods and services.
• In general, when prices rise, buyers will typically buy less and vice versa when prices fall.

In order to compete and lead the market, organizations need to obtain new products by carefully executing the new product development process.

Out of thousands of products entering the process, only a handful of products make it to the market. Therefore, it is vital to understand customers, market, and competitors in order to develop a new product that will deliver superior value to the customers.

There are 8 major steps in the development of a new product.

After concept testing, the next stage is:

Market strategy development:

• When a promising concept has been developed and tested, it is essential to design an initial marketing strategy for the new product.
• The marketing strategy consists of three parts:

1. A description of a target market, the planned value proposition, the sales, profit goals, and the market share for the initial years.
2. An outline of the product's price, distribution, and marketing budget for the initial years.
3. The planned long-term goals and marketing mix strategies.

.Therefore, after concept testing, a firm would engage in the Marketing strategy development stage in developing and marketing a new product

Current Purchasing Power Accounting (CPPA):

1. This approach is also known as General Price Level Accounting.
2. Under this approach, the historic cost accounting data are adjusted on the basis of any established and approved general price index at a given date.
3. In India, the Wholesale Price Index (WPI) of the Reserve Bank of India (RBI) can be taken which shows the change in the value of the rupee in the past years.
4. This approach takes into account the changes in the value of items as a result of the general price level, but it does not account for changes in the value of individual items.

The formula for the conversion of historic cost to the general price level is as under:

Conversion Factor = Index Converting To / Index Converting From

∴ Conversion Factor = 200/150 = 1.33333

The original invested capital is then multiplied by this conversion factor.

Value Of Machinery = 60000 x 1.33 = Rs. 80,000.

Thus, option 3 is the correct answer.

Opening Capital = Closing Capital + Drawings - Additional Capital - Profit + Loss

1. The opening balance is the balance that is brought forward at the beginning of an accounting period from the end of a previous accounting period or when starting out.
2. The opening balance is the number of funds in a company's account at the beginning of a new financial period.
3. It is the first entry in the accounts, either when a company is first starting up its accounts or after a year-end.
4. In an operating firm, the ending balance at the end of one month or year becomes the opening balance for the beginning of the next month or accounting year.
5. The opening balance may be on the credit or debit side of the ledger.
6. Opening Capital = Closing Capital + Drawings - Additional Capital - Profit + Loss

Thus, option 3 is the correct answer.

An income tax return filed after the due date is known as a "Belated return". A late fee will be required to pay, as applicable, by those filing belated ITR. 

If an individual fails to file an ITR before the due date, then as per section 139(4) of the Income Tax Act, he can file a Belated return.

Deadline to file belated return:

• A belated return can be filed anytime before the expiry of the relevant assessment year or before the assessment is complete, whichever is earlier.
• The relevant assessment year for the financial year is the immediately succeeding financial year.
• It means that an individual can file a belated return for FY2020-21 by March 31, 2022, i.e. before the end of the assessment year (AY)2021-22.

Therefore, Belated return u / s 139(4) can be filled at any time before the expiry of the relevant assessment year or before the assessment is complete, whichever is earlier. 

Penalty to file Belated returns:

• Until AY 2017-18, there was no penalty for filing belated income tax returns.
• According to amendments made in the budget 2017, taxpayers are liable to pay a penalty for filing belated returns.
• A new section, 234F, was inserted by the government in the Income Tax Act.
• As per this section, an individual would have to pay a fee of up to Rs 10,000 for filing ITR after the due dates specified in section 139(1) of the Act.
• This penalty became applicable from AY 2018-19, i.e., ITR filing for FY2017-18.
• If an individual files a belated return for FY2020-21 on or after January 1, 2022, but on or before March 31, 2022, then that individual will have to pay a penalty of Rs. 10,000.
• However, if the total income of the taxpayer is less than Rs. 5 lakh then the penalty amount will not exceed Rs. 1000.

Mistake Points

• Prior to the amendment vide Finance Act 2021, if any person had not furnished the ROI within the time allowed under section 139(1), then that person was required to furnished the ROI before the end of the relevant assessment year.
• In the Finance Act 2021 the time period to file return under section 139(4) has been reduced by 3 months i.e. the person who has not filed his ROI within the time prescribed under section 139(1), then the person may file its ROI, within three months prior to the end of the relevant assessment year or before the completion of the assessment, which- ever is earlier.

The Income Tax Act, 1961 is a comprehensive statute that focuses on the various rules and regulations that govern taxation in the country. It provides for levying, administering, collecting, and recovering income tax for the Indian government. 

A tax audit is an examination of a tax return by the IRS to verify that your income and deductions are precise. 

There are three main types of tax audit namely external audit, internal audit, and Internal Revenue Service (IRS) audit.

As per Section 44AB of the Income Tax Act, 1961:

• Every person carrying on a business is entitled to get his accounts audited, if his turnover, total sales, or gross receipts in business exceeds Rs. 1 crore in the previous year
• Every person carrying on a profession is entitled to get his accounts audited if his gross receipts in profession exceed Rs. 50 lakhs in the previous year.

Therefore, a tax audit is compulsory in case of a person is carrying on a business whose gross turnover exceeds Rs. 1 crore.

With effect from 1^st April 2020, that is from the assessment year 2020-21, the above provision is amended as follows:

The threshold limit has been revised to increase it for a person carrying on a business from Rs. 1 crore to Rs. 5 crore if the following conditions are satisfied:

• His aggregate of all the cash receipts in the previous year does not exceed 5% of such receipts.
• His aggregate of all the cash payments in the previous year does not exceed 5% of such payments.

Mean: By ‘mean’ we refer to an Arithmetic mean. The arithmetic mean refers to the average of a data set of numbers. It can either be a simple average or a weighted average. To calculate a simple average, we add up all the numbers given in the data set and then divided by how many numbers there are.

Median: Median is the middle number of a given data set when it is arranged in either a descending order or in ascending order. If there is an odd amount of numbers, the median value is the number that is in the middle whereas if there is an even amount of numbers, the median is the simple average of the middle pair in the dataset. Median is much more effective than a mean because it eliminates the outliers.

Mode: The mode refers to the number that appears the most in a dataset. A set of numbers may have one mode, or more than one mode, or no mode at all. 

The relationship between mean, median, and mode can be defined in four different cases:

In the case of a moderately skewed distribution, i.e. in general, the difference between mean and mode is equal to three times the difference between the mean and median. Thus, the empirical relationship can be written as:

Mean – Mode = 3 (Mean – Median)

∴ Mean - Mode = 3Mean - 3Median

∴ Mean - 3Mean = - 3Median + Mode

∴ - 2Mean = - 3Median + Mode

∴ Mode = 3Median - 2Mean. 

Thus, Option 2 is the correct answer.

1. In the case of a frequency distribution that has a symmetrical frequency curve, the empirical relation states that mean = median = mode.
2. In the case of a positively skewed frequency distribution curve, mean > median > mode.
3. In the case of negatively skewed frequency distribution mean < median < mode.

Walter's Model: Professor James E. Walter argues that the choice of dividend policies almost always affects the value of the enterprise. His model shows clearly the importance of the relationship between the firm’s internal rate of return (r) and its cost of capital (k) in determining the dividend policy that will maximize the wealth of shareholders.

The formula to determine the market value of share as suggested by Prof. Walter is as under :

P = (D/K_e) + [r(E - D)/K_e] / K_e

where, 

P = Market Price Per Share

D = Dividend Per Share

r = Internal Rate Of Return

E = Earnings Per Share

K_e = Cost Of Equity Capital or Capitalization Rate

Therefore,

P = (1.6/0.15) + [0.18(4-1.6)/0.15] / 0.15

∴ P = 10.67 + 19.2

∴ P = Rs. 29.87

29.87 Rupees will be the price per share as per Walter model if the payout ratio is 40%.

Thus, option 1 is the correct answer.

D = 4 x 0.40 = 1.6

Old Profit Sharing Ratio (X and Y) = 3:2

Z is admitted for a 1/5^th share.

New Profit Sharing Ratio (X and Y) = 1 - 1/5 = 4:5

A's New Profit Sharing Ratio = 3/5 * 4/5 = 12/25

B's New Profit Sharing Ratio = 2/5 * 4/5 = 8/25

A: B: C = 12/25: 8/25: 1/5

Using the L.C.M method to make denominators common, 

New Profit Sharing Ratio Of A:B: C is 12:8:5

Thus, option 1 is the correct answer.

Swachh Bharat Abhiyan or Clean India Mission is a country-wide initiative taken by the Government of India in 2014 to eliminate open defecation and improve solid waste management. The main aim of this project is to create sanitation facilities for all and provide every rural family with a toilet by 2019.

Social marketing:

• It is a systematic application of marketing activities along with other concepts and techniques to achieve specific behavioral goals for social good.
• Philip Kotler states, "Social marketing seeks to influence social behaviors not to benefit the marketer, but to benefit the target audience and the general society."
• This technique has been used extensively in international health and sanitation programs.
• The main objective of social marketing is to promote the well being of society.

Therefore, Swachh Bharat Abhiyan is an example of social marketing. 

Sustainable marketing:

• It is the promotion of environmentally and socially responsible products, practices, and brand values.
• It is also referred to as green marketing and it focuses on a long-term strategy and value for current and future clients.
• If someone has spent a little bit more amount on a product just because it is locally sourced or 100% recyclable then they have experienced sustainable marketing.

Services marketing:

• It refers to the application of various sets of techniques or strategies to the consumer's need for an intangible product.
• The American Marketing Association defines services marketing as an organizational function and set of processes for identifying and creating, communicating and delivering value to customers. And for managing relationships in a way that benefits the organization and stakeholders.

Relationship marketing:

• It is defined as, "Relationship marketing is a strategy designed to foster customer loyalty, interaction and long-term engagement. It is designed to develop strong connections with customers by providing them with information directly suited to their needs and interests and by promoting open communication."
• It refers to the activities undertaken by the organization to maintain loyalty, profitability, and long-term relationship with the customers.

Total Sanitation Campaign is one of the most prominent social marketing campaigns undertaken by the Government of India under the Swachh Bharat Mission.

Market segmentation refers to subdividing a larger market into smaller submarkets.

Philip Kotler defines, "Market segmentation is a process of identifying groups of buyers with different desires or requirements."

Criteria for effectively evaluating the resulting market segment:

1) Identifiable and Measurability:

• The segments must be identifiable so that the marketer can know which customers belong to a segment and which do not.
• The size, profile, and other relevant characteristics must be measurable in terms of data.
• It must be possible to determine the values of the variables used for segmentation with justifiable efforts.
• It is important especially for demographic and geographic variables.

2) Relevant size of the resulting segment:

• The size and the profit potential of the segment must be large enough to economically justify separate marketing activities for that segment.
• If the resulting segment is small in size then the cost of marketing activities will not be justified.

3) Accessibility:

• The segment has to be accessible and servable for the organization.
• This criterion refers to the ease of effectively reaching chosen segments with marketing efforts.
• Some desired segments could be inaccessible due to legal reasons.

4) Substantial:

• The resulting segments must be substantial to generate required returns.
• The activities with a small segment could give a biased or negative result.

These four are important criteria for effectively evaluating the resulting market segment.

Therefore, Perishability is NOT a criterion for evaluating the resulting market segment.

Perishability:

• It is used in marketing to describe the way in which a service cannot be stored for sale in the future.
• Once served to a customer, the service is totally consumed and could not be delivered to another consumer.

A firm’s Weighted Average Cost of Capital (WACC) represents its blended cost of capital across all sources, including common shares, preferred shares, and debt.

The cost of each type of capital is weighted by its percentage of total capital and they are added together.

WACC = (10 x 0.20) + (15 x 0.80)

∴ WACC = 2 + 12

∴WACC = 14%

The overall cost of capital is 14%.

Thus, option 4 is the correct answer.

The correct answer is Low.

1. Penetration pricing is a marketing strategy used by businesses to attract customers to a new product or service by offering a lower price during its initial offering.
2. The lower price helps a new product or service penetrate the market and attract customers away from competitors.
3. The goal of a price penetration strategy is to entice customers to try a new product and build market share with the hope of keeping the new customers once prices rise back to normal levels.

Hence Option 3 is correct

Sub - optimal allocation of resources under monopoly to cause social welfare loss is often inferred as Deadweight loss.

The deadweight loss is the potential gains that did not go to the producer or the consumer. As a result of the deadweight loss, the combined surplus (wealth) of the monopoly and the consumers is less than that obtained by consumers in a competitive market.

Resource allocation is the assignment of available resources to various uses. In the context of an entire economy, resources can be allocated by various means, such as markets, or planning. Allocation drift increases when the company or the economy is on a high growth path and declines when the growth rate slows down or during the period of recession.

Monopoly Loss The monopoly pricing creates a deadweight loss because the firm forgoes transactions with the consumers. Monopolies can become inefficient and less innovative over time because they do not have to compete with other producers in a marketplace. In the case of monopolies, abuse of power can lead to market failure.

Opportunity loss refers to the difference between the optimal profit or payoff for a given state of nature and the actual payoff received for a particular decision. In other words, it is the amount lost by not picking the best alternative in a given outcome.

Reverse Repo Rate is a tool used by the Reserve Bank of India primarily to absorb liquidity.

• The Reverse Repo Rate is an important Monetary Policy tool used by the Reserve Bank of India (RBI) to control liquidity and inflation in the economy.
• Under the Reverse Repo Rate, banks deposit excess funds with the RBI and earn interest for it.
• Reverse Repo rate is the rate at which the Reserve Bank of India borrows funds from the commercial banks in the country.
• In other words, it is the rate at which commercial banks in India park their excess money with the Reserve Bank of India usually for the short-term.
• This is another financial instrument used by the RBI to control the supply of money in the nation.
• In case the RBI is falling short on money, they can always ask commercial banks to pitch in with funds and offer them great reverse repo rates in return.
• This gives banks and other financial institutions the opportunity to earn a profit on excess funds.
• The current Reverse Repo Rate of 2022 is 3.35%.

A multinational firm is the one that controls and operates production facilities in multiple countries.

• A multinational corporation (MNC) or multinational enterprise (MNE) is a corporation registered in more than one country or has operations in more than one country.
• It is a large corporation which both produces and sells goods or services in various countries.
• These are large companies with operations in several countries across the world. Thus multinational corporations are an important source of foreign direct investment (FDI).

List of the Advantages of Multinational Corporations

1. provides an inflow of capital.
2. reduce government aid dependencies in the developing world.
3. allow countries to purchase imports.
4. provide local employment.
5. improve the local infrastructure.
6. diversify local economies.
7. create consistent consumer experiences.
8. encourage more innovation.
9. increase cultural awareness.

List of the Disadvantages of Multinational Corporations

1. creates higher environmental costs.
2. don’t always leave profits local.
3. import skilled labor.
4. create one-way raw material resource consumption.
5. encourage political corruption.
6. support “sweatshop” labor.
7. remove jobs from their home country.
8. build legal monopolies.

The defenders of the sustainability approach toward Corporate Social Responsibility (CSR) point out that all economic activity exists within a biosphere that supports all life.

• Corporate social responsibility (CSR) is a self-regulating business model that helps a company be socially accountable—to itself, its stakeholders, and the public.
• By practicing corporate social responsibility, also called corporate citizenship, companies can be conscious of the kind of impact they are having on all aspects of society, including economic, social, and environmental.
• To engage in CSR means that, in the ordinary course of business, a company is operating in ways that enhance society and the environment, instead of contributing negatively to them.

The objective of energy management and audit invariably includes following in business enterprises

A. Minimising cost of energy consumption

B. Minimising waste in energy consumption

D. Minimising environmental degradation

Energy management is the process of monitoring, controlling, and conserving energy in a building or organization. The energy management process starts with an energy audit of a given location. Just as stated above, the goal is to find opportunities to improve efficiency.

• Energy today has become a key factor in deciding the product cost at a micro-level as well as in dictating the inflation and the debt burden at the macro level. Energy cost is a significant factor in economic activity at par with factors of production like capital, land, and labor.
• The imperatives of an energy shortage situation call for energy conservation measures, which essentially mean using less energy for the same level of activity.
• Energy Audit attempts to balance the total energy inputs with their use and serves to identify all the energy streams in the systems and quantifies energy usages according to its discrete function.
• Energy Audit helps in energy cost optimization, pollution control, safety aspects and suggests the methods to improve the operating & maintenance practices of the system.
• It is instrumental in coping with the situation of variation in energy cost availability, reliability of energy supply, the decision on appropriate energy mix, the decision on using improved energy conservation equipment, Instrumentations, and technology.
• The Energy Audit provides the vital information base for the overall energy conservation program covering essentially energy utilization analysis and evaluation of energy conservation measures.

The energy-cum-environment audit allows simultaneous consideration of energy and environmental aspects. As a result, it is possible to identify options to reduce the overall cost of energy as well as pollution control. Also, some of the principles of energy cost reduction and pollution control are identical. However, it meticulously does not scale the harmful impacts of pollution on the health of the natives.

Therefore, option 3 is the correct answer.

Following aptly aims to alleviate the financial stress of the borrowers at bottom of the pyramid by reducing their cost of credit in the covid - 19 pandemic

A. A generic loan moratorium to the borrowers

B. Two percent interest subvention on Sishu loans under the Pradhan Mantri Mudra Yojana

D. Financial incentives to Farmer Producer Organisations (FPOs) and Micro, Small and Medium Enterprises (MSMEs)

A 360-day tenor special repo facility, and a credit guarantee scheme for exporters, farmers, and SMEs to facilitate the implementation of the government’s stimulus packages

The government decided to provide a 2 percent interest subvention to borrowers under the 'Shishu' category of the flagship Pradhan Mantri MUDRA Yojana (PMMY). Under the Shishu category, collateral-free loans of up to Rs 50,000 are given to beneficiaries. These loans are classified as MUDRA loans under PMMY.

The government announced a Rs 15,000 crore infrastructure development fund with an interest subsidy scheme to promote investment by private players and MSMEs in dairy, meat processing, and animal feed plants, a move which is expected to create 35 lakh jobs.

In the official paper, this question remains canceled and marks awarded to all candidates appeared in the test.

Organizational socialization is one very important aspect of orientation, the introduction of a new employee to the enterprise. Filling a vacant position is not designed for the socialization of new managers.

• Organizational socialization is the process by which people learn about and adjust to the knowledge, skills, attitudes, expectations, and behaviors needed for a new or changing role within an organization.
• The socialization process truly begins when a future employee simply considers working for a company. The candidate forms expectations of what the daily realities and culture of a workplace will be.
• This preliminary socialization continues during the hiring process. In interviews, those responsible for hiring communicate the organization's norms and values and try to ascertain whether or not a candidate will be a good fit.
• During this process, candidates may already be purposely or subconsciously altering their behavior in order to better reflect what they perceive to be the dominant organizational values.

Formal Socialization

• Most organizations engage in some type of formal socialization for new hires.
• In some cases, this occurs via an orientation or training program that new employees undergo before assuming the functions of their new positions. Formal socialization may also occur through a mentoring process whereby values, skills, and habits are communicated to a new hire by a more senior employee.
• In both cases, the intended effect is to alter the behavior and values of the new employees until they are in line with those behaviors and values prized by the organization.

Informal Socialization

• Organizational socialization also occurs through any number of informal channels via peer interactions and informal interactions with management.
• In many ways, this is where the most effective and lasting socialization takes place.
• As new hires observe and interact with fellow employees in the lunchroom and around the water cooler, and as they observe the accepted behaviors of both peers and superiors in a variety of workplace situations, they gain an understanding of the true values of an organization and soon change their behaviors accordingly.

Hence, Filling a vacant position is not designed for the socialization of new managers.

Grouping of countries committed to remove all barriers to the free flow of goods and services between themselves and also pursue independent external trade policies is called the Free trade area.

Free trade area: This is the most basic form of economic cooperation. Member countries remove all barriers to trade between themselves but are free to independently determine trade policies with nonmember nations. An example is the North American Free Trade Agreement (NAFTA).

Customs union

• This type provides for economic cooperation as in a free-trade zone. Barriers to trade are removed between member countries. The primary difference from the free trade area is that members agree to treat trade with nonmember countries in a similar manner.1

Common market

• It is a formal agreement where a group is formed among several countries in which each member country adopts a common external tariff.
• In a common market, countries also allow free trade and free movement of labor and capital among the members of the group.
• This trade arrangement is aimed at providing improved economic benefits to all the members of the common market.

Economic union 

• It is a type of trade bloc which is composed of a common market with a customs union.
• The participant countries have both common policies on product regulation, freedom of movement of goods, services, and the factors of production (capital and labor), and a common external trade policy.
• Purposes for establishing an economic union normally include increasing economic efficiency and establishing closer political and cultural ties between the member countries.

The invisible hand, metaphor, introduced by the 18^th-century Scottish philosopher and economist Adam Smith in 1759, characterizes the mechanisms through which beneficial social and economic outcomes may arise from the accumulated self-interested actions of individuals, none of whom intends to bring about such outcomes.

• Smith argued against mercantilism and was a major proponent of laissez-faire economic policies.
• In his first book, "The Theory of Moral Sentiments," Smith proposed the idea of an invisible hand—the tendency of free markets to regulate themselves by means of competition, supply and demand, and self-interest.
• The Theory Of Moral Sentiments was a real scientific breakthrough.
• It shows that our moral ideas and actions are a product of our very nature as social creatures.
• It argues that this social psychology is a better guide to moral action than is the reason.

Intellectual Property Rights (IPRs) protect the use of information and ideas that are of Commercial Value.

The four types of intellectual property rights include:

1. Trade Secrets
2. Trademarks
3. Copyrights, and
4. Patents

The Economic and Commercial Value of Intellectual Property Rights (IPRs): IPRs as a Means of Protecting Business Interests, Encouraging Innovation and Technology Transfer and Promoting Trade and Investment. 

• The valuation of IP is therefore essential in the framework of commercial transactions. Unfortunately, this aspect is often overlooked by businesses not experienced with these types of deals resulting in transactions that are either overvalued or undervalued and therefore unprofitable or sometimes disastrous situations leading to bankruptcy
• It is therefore essential to analyze and assess the value of the intellectual property during the negotiation process, before the conclusion of the commercial transaction
• A brand is generally subject to trademark protection.
• Technology can be subject to patent, industrial design, and/or copyright protection
• Other types of intellectual property may also exist

Uppasala model for internationalisation of business operations is not valid for Services organiations.

• The Uppsala model is one of the theories describing the internationalization process of firms. The model states that firms first choose to enter nearby markets with low market commitment.
• The Uppsala model is based on four core concepts: market commitment, market knowledge, current activities and commitment decisions.
• The 1977 model is grounded in the broader research program on international business, led by Professor Sune Carlson, which was launched following the establishment of the Institute of Business Studies at the University of Uppsala in the late 1950s.

Basel III is a list of comprehensive reforms whose goal is to strengthen the regulation, supervision, and risk management of the banking sector. Basel III framework is built upon the Basel I and Basel II framework.

Pillars of Basel III accord:

• Pillar 1 - Enhanced Minimum capital and liquidity requirements.
• Pillar 2 - Enhanced Supervisory review process of firm-wide risk management and capital planning.
• Pillar 3 - Enhanced Risk disclosure and market discipline.

Therefore, the three mutually reinforcing pillars of Basel-III capital regulations are based upon Minimum capital standards, Supervisory review of capital adequacy, and Market discipline.

Regulatory elements of Basel III:

• Higher Tier 1 and Tier 2 capital requirements - this serves as a buffer to absorb shocks during a financial crisis.
• Capital conservation buffer - this is mandatory additional capital that is required to behold over and above its minimum capital requirement.
• Counter critical measures - there are regulations to deal with cyclical changes in the balance sheet of banks.
• Liquidity standards - Liquidity coverage ratio and Net stable funding ratio are the two liquidity standard ratio mandated.
• Capital leverage ratio - this is used to determine the capital adequacy of the banks and also puts a constraint on how banks may leverage their capital.

A shutdown point is a concept in managerial economics that suggests that a business should at least stop production temporarily and close its door because its no longer profitable to sustain its operations.

The three main factors that help in determining a shutdown point of a business:

• How much variable cost of operations goes into producing a good or service.
• The marginal revenue received from that good or service.
• The type of goods and services provided by the firm.

For a one-product firm, whenever the marginal revenue drops below marginal variable costs, the shutdown point occurs.

For a multi-product firm, whenever the average marginal revenue received drops below the average variable cost of operations, the shutdown point occurs.

A firm might reach its shutdown point for reasons that range from standard diminishing marginal returns to declining market prices for its merchandise.

Therefore, the average marginal revenue received and the average variable cost of operations are sufficient to determine the shutdown point of a multi-commodity firm in the short-run.

To summarize, if:

• price > minimum average cost, then firm stays in business [refer (a) diagram]
• price < minimum average cost, then firm shuts down [refer (b) diagram].

SERVQUAL:

• It is a multidimensional research instrument, designed to capture consumer expectations and perception of service along the five dimensions (reliability, assurance, tangibles, empathy, responsiveness) of service quality.
• The SERVQUAL questionnaire has been described as "the most popular standardized questionnaire to measure service quality."
• Service firms use this instrument to measure service quality and customer satisfaction.

SERVPREF:

• Cronin and Taylor proposed that the perception of performance is the only criteria for service quality and developed the SERVPREF model.
• It focused on trying to overcome the "perceptions-minus-expectations" measurement focus of SERVQUAL.
• The SERVPREF model aimed to provide an alternative method of measuring perceived service quality and the importance of the relationship between service quality, customer satisfaction, and purchase intentions.

DINESERV:

• Dining consumers determine which restaurants meet their service quality and value standards.
• DINESERV is proposed as a reliable, relatively simple tool for determining how consumers view a restaurant's quality.
• The 29 item DINESERV questionnaire comprises service-quality standards that fall into five categories: assurance, empathy, reliability, responsiveness, and tangibles.

RSQS:

• RSQS is an abbreviation of the Retail Service Quality Scale.
• As service quality plays a vital role in creating quality perception, retail service quality is also associated with future consumption behavior in terms of customer's intention to visit, purchase, and recommend to others.
• RSQS is a 28 item scale with five dimensions: physical aspect, reliability, personal interaction, problem-solving, and policy development.

Therefore, survey instruments used to assess customer perception of service quality are called SERVQUAL, SERVPREF, DINESERV, RSQS.

CETSCALE:

• The consumer ethnocentrism tendencies scale (CETSCALE) was developed by Shimp and Sharma in 1987 to measure consumer ethnocentrism.
• Consumer ethnocentrism focuses on the responsibility and morality of purchasing foreign products vs. consumer's loyalty towards products made in their own country.
• For the ethnocentric consumer, the perception of importing products is not appropriate because it is not patriotic, as a result, ethnocentric consumers will evaluate their products differently from those manufactured in other countries.
• It is the most commonly used scale in marketing literature.

Channel conflict refers to any dispute, difference arising between two or more partners, where one partner's activity affects the business or goal accomplishment of other channel partner.

In the process of regular supply of goods in the market, several intermediaries join the channel, any clash among these channel intermediaries is considered as channel conflict.

Types of Channel conflict:

Vertical:

• A vertical channel is a structured, organized, and unified distribution channel system in which producers and intermediaries like wholesalers and retailers work closely to facilitate the smooth flow of goods and services from the producer to the consumer.
• In vertical channel conflict, the channel partner that belongs to a higher level enters into a dispute with a channel partner of a lower level or vice-versa.
• For example, channel conflict between wholesalers and retailers or dealers and retailers.

Horizontal:

• A horizontal channel is a form of distribution channel where two or more companies at the same level unrelated to each other come together to gain economies of scale.
• In horizontal channel conflict, the channel partners belonging to the same level enters into a dispute.
• For example, issues between two or more retailers of different territories, on the grounds of manufacturer's biases, etc.

Therefore, Channel conflicts can be Vertical and Horizontal only.

Multi-channel:

• A multi-channel is a distribution system where a single producer sets up two or more marketing channels to reach one or more customer segments.
• Multi-channel conflicts arise when a producer has established two or more channels that compete against each other in selling to the same market.
• In other words, multi-channel conflicts refer to where the channel partners involved in a particular distribution channel encounters an issue with the other channel.

There are only 3 types of Channel Integration:

1. Vertical Marketing System
2. Horizontal Marketing System
3. Multi-channel / Hybrid Marketing System.

Retail analytics focuses on providing insights related to sales, inventory, customers, and other important aspects crucial for a merchant's decision-making process. It is used to help make better choices, run a business more efficiently, and deliver improved customer service analytics.

Data mining:

• Data mining is a concept of computer science but has played a significant role in the retail industry as it helps retailers to learn the buying behavior and patterns of their customers.
• Retailers keep on collecting information about seasonal product sales, transactional data, and demographics, etc. the collected data is of no use if it is not converted into useful knowledge and converting data into knowledge requires a proper mechanism.
• Data mining is proved to be one of the most important tools to identify useful information from the large pool of information collected over time.
• It is also used to improve revenue generation and reduce the costs of business.

Therefore, retail analytic applications involve the use of Data mining techniques to gain insights into customer's buying patterns.

Factor analysis:

• Factor analysis is a technique used to reduce a large number of variables into a few factors.
• This technique extracts maximum common variance from all variables and puts them into a common score.
• As an index of all variables, that score can be used for further analysis.

Data scraping:

• Data scraping is a technique in which a computer program extracts data from human-readable output coming from another program.
• It often ignores binary data, display formatting, redundant labels, and other information that is either irrelevant or hinders automated processing.
• It is generally considered as ad-hoc, inelegant techniques used as a last resort when no other mechanism for data interchange is available.

Data cloning:

• Data cloning refers to a complete and separate copy of a database system that includes the business data, the DBMS software, and any other application that makes up the environment.
• Data cloning involves both fully functional and separate in its own right.
• The cloned data can be modified at its inception due to configuration changes or data subsetting.

Regression analysis:

• Regression analysis is a reliable method of identifying which variables have an impact on a topic of interest.
• The process of performing a regression allows you to confidently determine which factors matter most, which factors can be ignored, and how these factors influence each other.

A list and definition of different types of economic costs.

1. Sunk Cost

• Sunk costs are those which have already been incurred and which are unrecoverable.
• In business, sunk costs are typically not included in consideration when making future decisions, as they are seen as irrelevant to current and future budgetary concerns.
• Sunk costs are in contrast to relevant costs, which are future costs that have yet to be incurred.

2. Marginal Cost

• Marginal cost can help an organization optimize its production through economies of scale.
• Marginal cost is the change in the total cost that arises when the quantity produced is incremented by one unit; that is, it is the cost of producing one more unit of a good.
• A company that is looking to maximize its profits will produce up to the point where marginal cost (MC) equals marginal revenue (MR).
• Fixed costs are constant regardless of production levels, so higher production leads to a lower fixed cost per unit as the total is allocated over more units.
• Variable costs change based on production levels, so producing more units will add more variable costs.

3. Investment Cost

• The cost of an investment includes acquisition charges such as brokerage, fees and duties.
• If an investment is acquired in exchange, or part exchange, for another asset, the acquisition cost of an investment is determined by reference to the fair value of the asset given up.

4. Implicit cost

• An implicit cost is a cost that exists without the exchange of cash and is not recorded for accounting purposes.
• Implicit costs represent the loss of income but do not represent a loss of profit.
• These costs are in contrast to explicit costs, which represent money exchanged or the use of tangible resources by a company.

Therefore, the correct match is:

Hence option1 is correct

A. Provisioning of collateral-free automatic loans worth Rs. 3 lakh crores

B. Provision of 100% credit guarantee coverage to banks and NBFCs on principal and interest for loans to NBFCs

C. Redefined MSMEs to include both investment and turnover criteria

These 3 Statements are correct.

• The package announced by the government includes INR 3 trillion for collateral-free loans to MSMEs of four-year tenure with no payments due for one year.
• The government will offer a 100 percent credit guarantee cover on ₹3-lakh crore worth of loans that banks and non-banking finance companies (NBFCs) are expected to give to businesses, including micro, small and medium enterprises (MSMEs), which have been badly hit due to the pandemic.
• Union Cabinet has approved the revised new definition of the MSME. The MSMEs have been redefined on the basis of investment limit and turnover size. The Medium Units will now be defined as companies with up to Rs 50 crore investment and turnover of Rs 250 crore.
• The Government has informed the Supreme Court that loans up to ₹2 crores taken by individuals and Micro, Small, and Medium Enterprises (MSMEs) will be eligible for a waiver of compound interest during the six-month moratorium period, i.e., March-August 2020. Hence point E is incorrect as there is the only waiver of interest and not the principal.

The consumer's price sensitivity is influenced by:

Who bears the cost

What percentage of total expenditure does the product represent

Consumption of product by the customer

Knowledge about the product

Price sensitive customers are those who view price as a serious factor in a purchase. Some customers view extremely low prices as too good to be true and may assign a poor value to a product without having tried it. These types of prestige price customers often refuse to purchase a product of lower cost.

On the other hand, bargain hunters may only look for the lowest cost possible, without regard to the overall quality or longevity of the item. Learning how to deal with price-sensitive customers helps improve sales and customer service initiatives.

• Price sensitivity is the degree to which demand changes when the cost of a product or service changes.
• Price sensitivity is commonly measured using the price elasticity of demand, which states that some consumers won't pay more if a lower-priced option is available.
• The importance of price sensitivity varies relative to other purchasing criteria; quality may rank higher than price, making consumers less susceptible to price sensitivity.

Utility maximization refers to the concept that individuals and firms seek to get the highest satisfaction from their economic decisions.

The change in a consumer’s consumption of a good in response to an income-compensated price change is called the substitution effect. The substitution effect always involves a change in consumption in a direction opposite that of the price change.

• When a consumer is maximizing utility, the ratio of marginal utility to price is the same for all goods.
• For a consumer who purchases only two goods, price reduction increases the extra utility per rupee available from the good whose price has fallen; a consumer's purchasing power will increase and thus purchase more of it.
• An income-compensated price increase reduces the extra utility per rupee from the good; the consumer will purchase less of it.
• In other words, when the price of a good falls, people react to the lower price by substituting or switching toward that good, buying more of it and less of other goods, if we artificially hold the consumer’s ability to buy goods constantly.
• Total utility is the aggregate summation of satisfaction that a consumer receives through the consumption of goods or services.
• When the price of goods decreases, the rate of consumption will increase i.e. the consumer's total utility will increase as well.

Therefore, Statements A and B only are correct.

Capital adequacy ratio (CAR) is the ratio of a bank's capital in relation to its risk-weighted assets and current liabilities. It is decided by central banks and bank regulators to prevent commercial banks from taking excess leverage and becoming insolvent in the process.

CAR is measured as:

• CAR = [Tier 1 + Tier 2 + Tier 3 (Capital funds)] / Risk weighted assets.
• The risk-weighted assets take into consideration credit risk, market risk, operational risk.

Therefore, in order to calculate the capital adequacy ratio, the banks are required to take into consideration credit risk, market risk, operational risk.

Credit risk is a possibility of loss due to the borrower's failure to repay a loan or meet contractual obligations.

Market risk is a possibility of loss due to changes in the market sector.

Operational risk is a possibility of loss due to inadequate or failed internal processes, control, system, people, or external events. 

The Basel III norms stipulated a CAR of 8%. 

However, as per RBI norms, Indian scheduled commercial banks are required to maintain a CAR of 9%, and Indian public sector banks are required to maintain a CAR of 12%.

Monopolistic competition is a type of imperfect competition in which many firms offer products and services that are similar to each other but are not perfect substitutes.

In a monopolistic competitive market:

• All firms have the same but a relatively low degree of market power.
• There are many firms offering similar but not identical products.
• There is easy entry and exit of firms in the market.
• These firms have little power to set short supply and raise prices to increase profit.
• The firms are small relative to the total market as there are many number of firms present providing goods and services in the market.
• Heavy advertisement and marketing are done by the firms of this market.
• Buyers and sellers have imperfect information.

Therefore, statements A and C only hold the truth about the monopolistically competitive market.

Therefore, it is clear from the above explanation that option 2) is the correct answer.

The explanation of the above ratio:

1. Current Ratio:

• The current ratio compares all of a company’s current assets to its current liabilities. These are usually defined as assets that are cash or will be turned into cash in a year or less, and liabilities that will be paid in a year or less.
• The current ratio is sometimes referred to as the “working capital” ratio and helps investors understand more about a company’s ability to cover its short-term debt with its current assets.
• Weaknesses of the current ratio include the difficulty of comparing the measure across industry groups, overgeneralization of the specific asset and liability balances, and the lack of trending information.
• Current Ratio= Current Assets/Current Liabilities

2. Debtor turnover ratio :

• While calculating this ratio, only the net credit sales is to be taken into consideration.
• Ideally, a company compares its debtors turnover ratio with the companies that have similar business operations and revenue and lie within the same industry.
• The formula to compute Debtors Turnover Ratio is: Debtors Turnover Ratio = Net Credit Sales/Average Account Receivable.
• Where Average Account Receivable includes trade debtors and bill receivables.
• The higher the Debtors turnover ratio, the better is the credit management of the firm.

3. Interest coverage ratio:

• The interest coverage ratio is used to see how well a firm can pay the interest on outstanding debt.
• Also called the times-interest-earned ratio, this ratio is used by creditors and prospective lenders to assess the risk of lending capital to a firm.
• A higher coverage ratio is better, although the ideal ratio may vary by industry.
• The Formula for the Interest Coverage Ratio: Interest Coverage Ratio=Interest Expense/EBIT​
• Where, EBIT=Earnings before interest and taxes​

4. Debt Equity Ratio

• The debt-to-equity (D/E) ratio compares a company’s total liabilities to its shareholder equity and can be used to evaluate how much leverage a company is using.
• Higher leverage ratios tend to indicate a company or stock with higher risk to shareholders.
• However, the D/E ratio is difficult to compare across industry groups where ideal amounts of debt will vary.
• Investors will often modify the D/E ratio to focus on long-term debt only because the risk of long-term liabilities are different than for short-term debt and payables.
• Debt Equity Ratio= Total Liabilities/Total shareholder’s Equity

Therefore, the correct match is:

Hence Option 1 is correct.

These three points are correct with respect to GST:

It is a destination tax

It benefits consuming states more

It is an umbrella tax to improve ease of doing business

Hence option 4 is correct.

• The Goods and Services Tax or GST is a major indirect tax reform introduced in India by integrating the major indirect taxes of the centre and states. It is a comprehensive tax levied on the manufacture, sale, and consumption of goods and services. The GST is a destination-based consumption tax made on value addition.
• The GST is a destination tax, it is expected to favour ‘consuming States’ as opposed to the richer ‘producing States’, which supply goods and services to consumers in other states besides their own. Even the IGST collected by the Centre is shared with the State where the good or service concerned is sold, not the one in which it was produced.
• A progressive tax is a tax where the average tax rate, or the total amount of tax paid as a percentage of income, increases as the taxpayer’s income increases. A tax may be progressive if people with higher incomes pay a higher tax rate. A regressive tax is the opposite, where the average tax rate, or amount of tax paid as a percentage of income, decreases as income increases**.** GST is a regressive tax compared to Income Tax, which is a progressive tax.
• GST aims to simplify indirect taxes so that businesses in India can focus on commercial and operational efficiency. In addition, the new GST regime is expected to give India a face-lift on the global map, and to improve the country's ranking on the ease of doing business index.

A service is a transaction in which there is no physical transfer of goods from the seller to the buyer. The benefits of such a service are held to be demonstrated by a buyer's willingness to make the exchange.

Readily accepted characteristics of the services are as follows:

1) Perishability:

• Services are perishable in nature.
• Goods if not sold today, can be preserved for further selling, but in the context of services, it is considered lost not only for today but even for the future.
• For example, if a seat in aircraft or a bedroom in a hotel remains unbooked, a chair in a cinema halls remains vacant; the business is found non-existent and the opportunity is lost as well.
• It creates unique strategic challenges and the opportunities come and the firms need to capitalize on the same by using excellence.

2) Inseparability:

• This characteristic is also a challenge that professional needs to face while marketing the services.
• It focuses on the fact that services are not of separable nature.
• Services are generated and supplied simultaneously.
• This feature makes it essential that the service-providers are behaving professionally so that the marketing process is not to pave the avenues for degeneration in the quality.

3) Intangibility:

• Intangibility is an important consideration that complicates the functionality of a marketing manager, especially while influencing the customers.
• It is a matter of consumer perception of the services and their expectations, not smelling or tasting the services.
• The customers expect safe, fast, decent services.
• As service is an abstract phenomenon, it is a unique strategic challenge for the marketer.

Therefore, Perishability, Inseparability, Intangibility only are readily accepted distinguishing characteristics of the services that create unique strategic challenges.

Other important characteristics of services are:

• Heterogeneity
• Ownership
• Simultaneity
• Quality measurement
• Nature of demand.

Price discrimination is a selling strategy that charges different prices for the same product or service from different customers. In price discrimination, the seller places different customers into groups based on certain attributes and then charges each group a different price.

Three factors to successfully practice price discrimination:

1. The firm must possess market power.
2. The firm must be able to recognize differences in demand or must be able to control supply.
3. The firm must have the ability to prevent the resale of the product from one buyer to another.

Therefore, Statements B and C only hold the truth to successfully practice price discrimination.

Types of Price Discrimination:

• First-degree price discrimination: the monopoly seller of a good or service must know the absolute maximum price that every consumer would be willing to pay.
• Second-degree price discrimination: the price of a good or service differs according to the quantity demanded.
• Third-degree price discrimination: the price differs according to consumer attributes like age, location, gender, economic or social status, etc.

Vouching refers to reviewing documentary evidence to see if it properly supports entries made in the accounting records. While vouching, and the auditor is looking for any errors in the amount recorded in the accounting records, as well as ensuring that the transactions are recorded in the correct accounts.

A sales voucher is a form of a receipt or documentation commonly given to a buyer of supplies or goods. It typically serves as proof of purchase when a provider must order or deliver the goods at a later point.

Vouching of sales includes:

Sales Book:

• Sales book records only credit sales of goods to the customer.
• When the goods are sold, invoices are sent out and that only becomes the source document or voucher for recording transactions in the sales book.

Dispatch of goods:

• Dispatching of goods refers to an act of sending goods to a particular place which is undertaken by a logistic unit.
• The term "lead time" can be used to refer to the time elapsed between order and dispatch of goods.
• The document of dispatch clarifies that the goods have been transported or dispatched under the conditions specified.

An auditor verifies and vouches for both the Sales Book and Dispatch of goods documents to check that they support the entries made in them and the inventory is maintained accordingly or not.

Therefore, options B and A are only related to the vouching of sales.

Debit notes:

• A debit note is a document used by a vendor to inform the buyer of current debt obligations.
• It can provide information regarding an upcoming invoice or can serve as a reminder for funds currently due.
• It is used in case of Purchase Returns, escalation/de-escalation in price, any other expenses incurred by the vendor on behalf of the party.

Credit notes:

• A credit note is a document used when there has been an error in an already issued invoice, such as when a customer wishes to change their original order or an incorrect amount.
• In other words, it is issued in any scenario that would require the invoice to be changed or re-issued.
• It is used in case of Sales Return, issued by a seller to buyer informing that his account is credited.

Market Structures:

“Market structures” refer to the different market characteristics that determine relations between sellers to each another, of sellers to buyers and more. There are four basic types of market structures.

Key PointsPerfect Competition

• 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.
• Buyers have complete or "perfect" information—in the past, present, and future—about the product being sold and the prices charged by each firm.
• Resources for such labor are perfectly mobile.
• Firms can enter or exit the market without cost.

Monopoly

• Competitors are not able to enter the market as there are high barriers to entry.
• There is only one seller in the market, meaning the company becomes the same as the industry it serves.
• The company that operates the monopoly decides the price of the product that it will sell without any competition keeping its prices in check. As a result, monopolies can raise prices at will.
• A monopoly often can produce at a lower cost than smaller companies. Monopolies can buy huge quantities of inventory, for example, usually a volume discount. As a result, a monopoly can lower its prices so much that smaller competitors can't survive.

Monopolistic Competition

• It occurs when an industry has many firms offering products that are similar but not identical.
• Unlike a monopoly, these firms have little power to set curtail supply or raise prices to increase profits.
• Firms in monopolistic competition typically try to differentiate their products in order to achieve above-market returns.
• Heavy advertising and marketing are common among firms in monopolistic competition and some economists criticize this as wasteful.

Oligopoly:

• Oligopoly is when a small number of firms collude, either explicitly or tacitly, to restrict output and/or fix prices, in order to achieve above normal market returns.
• Economic, legal, and technological factors can contribute to the formation and maintenance, or dissolution, of oligopolies.
• Government policy can discourage or encourage oligopolistic behavior, and firms in mixed economies often seek government blessing for ways to limit competition.

Therefore, the correct match is:

The Fisher Effect:

• The Fisher Effect refers to the relationship between both the nominal interest rate, real interest rate, and inflation expectations.
• It is an economic theory described by Irving Fisher in 1930.
• The Fisher Effect states that the real interest rate equals the nominal interest rate minus the expected rate of inflation.
• i.e. Real interest rate = Nominal interest rate - An expected rate of inflation.
• Therefore, the Nominal rate is equal to a real interest rate plus an expected inflation rate.
• The Fisher Effect has been extended to the analysis of the money supply and international currencies trading.
• The International Fisher Effect expands on the Fisher Effect, suggesting that because nominal interest rates reflect anticipated inflation rates and currency exchange rate changes are driven by inflation rates, then currency changes are proportionate to the difference between the two nation's nominal interest rates.
• In other words, exchange rate differential between two currencies is explained by interest - inflation rate differential.

Therefore, Statements A, B, and C only describe Fisher (Irving) effect.

Forecasting is a technique that uses historical data as inputs to make informed estimates that are predictive in determining the direction of future trends.

Problems in forecasting:

I Cyclical variation:

• Cyclical variations are long-term movements that represent consistently recurring rises and declines in the activity.
• These can be due to change in the business cycle as every organization passes from all the phases of the business cycle some time or the other.
• Prosperity, recession, depression, and recovery are the four phases of the business cycle.
• It is useful in formulating policies and forecasting activities.

II. Specification error:

• Specification error means that at least one of the key features or assumptions of the models is incorrect.
• As a consequence of the specification error, estimation of the model may give incorrect or misleading results.
• While forecasting, specification error can lead to problems as inaccurate estimates will be predicted.

Therefore, Statements B and C only include problems in forecasting.

I. Forecasting frequency:

• The length of a forecast and its frequency is interrelated.
• It is estimated that forecasts into the future are less reliable.
• Forecasts need to be updated on a regular periodic basis depending upon the change in the demand for the product.

II. Stationarity in data serires:

• Stationarity in data series refers to a process that has a property that the mean, variance, and autocorrelation structure do not change over time.
• A stationaries series is usually easy to predict as it is simply predicted that its statistical properties will be the same in the future.

III. Consistency in data series:

• Consistency refers to the quality or fact of remaining the same at different times.
• If there is consistency in a series of data, then the forecasting techniques adopted will be the same as it was earlier following the same pattern.

The span of management, also called the span of control refers to the ability of a superior to efficiently manage a number of subordinates. In other words, the manager has a group of subordinates who report directly to him is called a span of management.

Span of management are determined by various factors like:

• Manager's training determines the capacity and ability of factors such as leadership, communication, decision-making, control of subordinates.
• Manager's personal qualities like his attitude and personality factors can also determine how effectively he could manage his subordinates.
• Subordinates training also determines the span of management needed as if the subordinate is trained and experienced enough then there is a lesser need for supervision as compared to the new subordinates.
• If the Nature of work is repetitive and routine then the span of management will be wider as compared to the complex work.
• The degree of planning like clearly providing rules, procedures, methods, stand-alone plans is high, the degree of the span of management will be high as well.
• Staff assistance also determines the span of management, for example, if the subordinates are receiving necessary guidance on methods, quality standards, and other aspects of work from specialists then the span of control will be increased.
• Centralization of authority narrows down the span of management as the subordinates would require considerable instruction, clarification, consultation, etc.
• Delegation of authority will widen the span of management because if the manager clearly delegates and defines responsibility to his subordinate, he requires less time to devote to managing their actions as those specified tasks will be done effectively by the subordinates.

Therefore, the Span of management is determined by i) manager's training ii) manager's personal qualities iii) subordinates training.

V.A. Graicunas introduced the theory of span of management.

The closure is the term used when a business decides to discontinue or shut down its activities of the organization. A closure may be a result of bankruptcy, where the business has fewer funds to continue its operations, or when some other organization (or a competitor) decides to take over the firm and shut down as superfluous.

Closure can be of two types, voluntary or involuntary where voluntary closures of organizations are much rare as compared to involuntary closures of organization.

The shut down refers to complete cessation or closing down of the business and it involves:

i) No buying or selling of goods and services

ii) No manufacturing of products

iii) Assets to be sold or disposed off to pay the debts of the organization

iv) Returning capital to the owners after the organization decides to liquidate assets.

Therefore, option 1) is the correct answer.

Process Costing:

• Process costing is an accounting methodology used when there is mass production of similar products, where the cost associated with individual units of output cannot be differentiated from each other.
• Under this concept, costs are calculated over a fixed period of time, summarized, and then allocated to all the units produced during that period of time on a consistent basis.
• Process costing is the only reasonable approach in many industries to determine product costs.
• Examples of industries where this type of production occurs include oil refining, food production, and chemical processing.

Therefore, Process Costing is appropriate for Oil refining firms.

Three types of Process Costing:

1) Weighted Average Cost: It assumes that all costs whether from a previous year or current one, are lumped together and assigned to produce units.

2) Standard Costs: It is similar to weighted average costs, but standard costs are assigned to production units rather than actual costs; after total costs are accumulated using standard cost, these total are compared to actual accumulated costs, and the difference is charged to a variance account.  

3) First-in-First-out (FIFO) costing: FIFO is a more complex method as it creates layers of cost, one for any units of production that were started in the previous production period but not completed, and another layer for any production that is started in the current period.

According to The Partnership Act, 1932:

A. All partners are bound to carry on the business of the firm to the greatest common advantage and shall not obtain a private advantage at the expense of the firm and if a partner carries on a rival business in competition with the partnership, the other partners are entitled to restrain him.

B. Where a partner is entitled to interest on the capital subscribed by him, such interest on capital is an appropriation and shall be payable only out of the profits of the firm.

C. Every outgoing partner or the estate of any partner who ceased to be a partner has the right to claim either a share in the profits of the firm till his account is finally settled or an interest rate of six percent per annum on his share in the firm's property till his account is finally settled.

D. Expulsion of partner - Section 33 of the Partnership Act, 1932:

1. A partner may not be expelled by a firm by any majority of the partners, save in the exercise in good faith or powers conferred by contract between the partners.
2. The provisions of sub-sections (2), (3), and (4) of section 32 shall apply to an expelled partner as if he were a retired partner.

Therefore, Statements A, B, D only are false.

Therefore, from the above explanation, it is clear that option 3) is the correct answer.

Customer interviews are a common mechanism for gathering the Voice of Customer (VOC). Customer interviews are usually conducted one-to-one with individual customers or with a small number of people from the same business or family group. 

Problems with customer interview:

A non-random sample:

• A non-random sample is a sampling technique where the sample selection is based on some factors other than some random chance.
• Non-random sampling relies on the subjective judgement of the researcher.
• It is a cost and time-consuming method, it is easy to use when there is a small population to work with.

Response bias:

• Response bias, also known as survey bias, is the tendency of a person to untruthfully or misleadingly answer questions of a survey.
• The bias can be intentional or accidental, but with biased responses, there is inaccuracy in the data gathered so the survey data becomes less useful.
• This can become a problem with customer interviews, especially with self-reporting participant surveys.

Therefore, a non-random sample and response bias could be problems with consumer interviews.

Corporate Social Responsibility is a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders.

CSR eligibility criteria and spending as per the provisions of the Indian Companies Act 2013:

• Every company having a net worth of rupees five hundred crores or more,
• Or the turnover of rupees one thousand crores or more or
• a net profit of rupees five crores or more during any financial year.
• Two percent of average profit spend on CSR
• Penal action for non-compliance

shall constitute a Corporate Social Responsibility Committee of the Board consisting of three or more directors, out of which at least one director shall be an independent director.

Therefore, option 3 is the correct answer.

Customer relationship management (CRM) is the process of managing interactions with existing as well as past and potential customers. It is one of many different approaches that allow a company to manage and analyze its own interactions with its past, current, and potential customers. It uses data analysis about customers' history with a company to improve business relationships with customers, specifically focusing on customer retention and ultimately driving sales growth.

CRM process involves the activities and strategies that companies use to manage their interaction with current and potential customers. Successfully collecting information about your customers allows you to understand them more. In turn, you can improve your products and services based on their demands.

The steps in the CRM process are:

1. Collection of customer data: CRM systems allow companies to interact effectively with customers, streamline marketing processes, and improve profitability.
2. Analyzing customer data: CRM analytics comprises all programming that analyzes data about customers and presents it to help facilitate and streamline better business decisions. CRM analytics can be considered a form of online analytical processing (OLAP) and may employ data mining.
3. Identify the target customers: After analyzing data about customers next step in the CRM process is to identify the target customers.
4. Developing CRM programs: It refers to all strategies, techniques, tools, and technologies used by enterprises for developing, retaining, and acquiring customers. The software gathers customer data from multiple channels.
5. Implementing programs: Implementation is the process of installing CRM software so an organization can manage current and potential customer relationships. Successful CRM implementation can help businesses analyze customer interactions, efficiently track leads, and streamline processes.

Therefore, option 2 is the correct answer.

Standard costing is the practice of substituting an expected cost for an actual cost in the accounting records.

Standard costs are assigned to production units rather than actual costs; after total costs are accumulated using standard cost, these total are compared to actual accumulated costs, and the difference is charged to a variance account.  

Process of Standard Costing:

1) Establishing standard costs:

• The first step is to set the standards on the basis of management's expectations and the production engineer would anticipate the costs.
• While establishing the standard cost, more weightage is given to past records, the current plan of production, and future trends.
• Finally, the standard will be fixed in both quantity and costs.

2) Measurement/Determination of actual costs:

• After standards are set, the actual costs are determined for each element i.e. material, labor, and overheads.
• The actual costs can be measured using the invoices, accounts book, wage sheets, etc.

3) Comparison of actual and standard costs:

• The next step is to compare the actual costs that occurred with the standard costs determined earlier.
• The difference between them is known as a variance.

4) Identifying variances and causes of variance:

• If the variance is positive it is known as favorable variance, and if the variance is negative it is known as an unfavorable/adverse variance.
• After the comparison is complete, the next step is to find out the causes for favorable or adverse variance.
• Corrective measures must be taken to evaluate the overall performance.

5) Disposing the variances to cost and profit centers:

• The last step in the process is to dispose of the variance by transferring it to the costing profit and loss account.
• Another method is to carry forward the variances to the next financial year by crediting the same to a reserve account to be set off in a subsequent year.
• The favorable or adverse variance may cancel each other in the course of time and thus be disposed of.

Standard costing can be helpful in ascertaining the profitability of the business at any level of production.

Therefore, Option 1) is correct in the process of standard costing.

The accounting cycle is a process designed to make financial accounting of the business activities easier for the business owners. it provides clear guidelines for recording, analyzing, and final reporting a business's financial activities.

Activities in the process of accounting:

1) Recording the business transaction in the books of entry:

• The first step in the accounting cycle is identifying transactions and recording them in the books of entry i.e. journal entry.
• Companies will have many transactions throughout the year so recordkeeping is essential for recording all types of transactions.
• Journal entries for every transaction must be created.
• The choice between accrual and cash accounting will dictate when transactions are officially recorded.

2) Journalising the transaction in the ledger accounts:

• Once transactions are recorded in journal entries, they must be posted in the general ledger accounts.
• The general ledger helps in the breakdown of all accounting activities by accounts.
• It allows a bookkeeper to monitor financial positions by account.

3) Preparation of the Trial Balance:

• After posting all ledger accounts, the trial balance is prepared.
• A trial balance tells a company its unadjusted balances in each account.
• The unadjusted trial balance is then analyzed by creating a worksheet that is used to ensure that debits and credits are equal.
• If there are any discrepancies then adjustments will need to be made.

4) Preparation of Annual Financial Statements:

• After the adjustments are recorded as journal entries wherever necessary, the company generates its financial statements.
• For most companies, this statement will include income statements, balance sheets, and cash flow statements.
• Lastly, a company closes its books at the end of the day on a specified closing date.
• The closing statement provides a report of analysis of performance over the period.

5) Deriving meaningful inferences for business decisions:

• With the help of financial statements and closing statements, business owners can derive a meaningful inference about their business activities.
• It helps to ensure accuracy, consistency, and efficient financial performance analysis.

Therefore, Option 4) is the correct process of accounting activities.

Capital budgeting is a process of evaluating investments and huge expenses in order to gain the best returns on investment. it includes the decision to invest the current funds for addition, modification, disposition, or replacement of fixed assets.

Capital budgeting process sequence:

A. Cash flow estimation:

• Cash flow estimates are used to determine the economic viability of long-term investments.
• Cash flow estimation is an integral part of the valuation and capital budgeting process.
• It is necessary for assessing investment decisions of any kind.
• Project cash flows consider all kinds of cash inflows.

B. Identify discounting rate:

• A discount rate is the rate of return to discount future cash flows back to their present value.
• A discount rate expresses the change in the value of money as it is invested in a business over a period of time.
• Many companies calculate their WACC and use is it as a discount rate when budgeting for a new project.
• A discount rate helps in determining the NPV as when discount rates are large, cash flows in the future affect NPV less than when rates are small.

C. Determination of NPV:

• Net Present Value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows.
• NPV is used in the capital budget to analyze the profitability of a projected investment.
• A positive NPV indicates that the projected earnings generated by investment exceed the anticipated costs.

D. Project selection decision:

• When making a project selection decision, one with a higher NPV is preferred.
• The advantage of considering NPV over the Payback Period is that it takes into consideration the future value of money.
• There are mainly two project selection methods:

1. Benefit measurement methods
2. Constrained optimization methods.

Therefore, Option 2) is the correct sequence in the capital budgeting process.

Below is the explanation of the above deduction:

1. 80GG is a deduction under Chapter VI-A of the Income Tax Act, 1961. It has been introduced to provide relief to those individuals who do not receive any house rent allowance but are paying rent for the stay. Thus, an individual can claim a deduction for rent paid even if he or she does not get a house rent allowance.
2. Section 80GGA allows deductions for donations made towards scientific research or rural development. This deduction is allowed to all assesses except those who have an income (or loss) from a business and/or a profession. 100% of the amount that is donated or contributed is considered eligible for deduction.
3. Section 80GGB of the Income Tax Act, 1961, allows any Indian company or enterprise that donates to a political party or an electoral trust registered in India can claim a deduction for the amount contributed.
4. Section 80GGC of the Income Tax Act, 1961, allows the deductions from the total income of an individual taxpayer for his/her contributions made towards electoral trust or political party.

Section 80GGB deduction is allowed when the company donates, Section 80GGC deduction is allowed when any person donates.

Therefore, the correct match is:

Hence Option 3 is the correct answer.

The product life cycle is the amount of time a product goes from being introduced into the market until it's taken off the shelves. There are four stages in a product's life cycle—introduction, growth, maturity, and decline.

Stage 1 Introduction

• In this stage, a new product is launched in a target market where the intended consumers are not well aware of its presence.
• Customers who acknowledge the presence of the product may be willing to pay a higher price in the greed to acquire high-quality goods or services. With this consistent change in manufacturing methods, production completely relies on skilled laborers.
• Competition at the international level is absent during the introduction stage of the international product lifecycle. Competition comes into the picture during the growth stage when developed markets start copying the product and sell it in the domestic market.
• These competitors may also transform from being importers to exporters to the same country that once introduced the product.

Stage 2 Growth

• An effectively marketed product meets the requirements of its target market. The exporter of the product conducts market surveys, analyze and identify the market size and composition. At this stage, the competition is still low.
• Sales volume grows rapidly in the growth stage. This stage of the product lifecycle is marked by fluctuating increases in prices, high profits, and promotion of the product on a huge scale.

Stage 3 Maturity

• In this level of the product lifecycle, the level of product demand and sales volumes increase slowly.
• Duplicate products are reported in foreign markets marking a decline in export sales.
• In order to maintain market share and accompany sales, the original exporter reduces prices.
• There is a decrease in profit margins, but the business remains tempting as sales volumes soar high.

Stage 4 Decline

• This is the final stage of the product lifecycle. In this stage sales volumes decrease and many such products are removed or their usage is discontinued.
• The economies of other countries that have developed similar and better products than the original one export their products to the original exporter's home market.
• This has a negative impact on the sales and price structure of the original product. The original exporter can play a safe game by selling the remaining products at discontinued items' prices.

Therefore, the correct match is:

Hence Option1 is correct.

• Step 1:      
• Compute the income of an individual under 5 heads of income on the basis of his residential status.
• Step 2:      
• The income of any other person, if includible u/s 60 to 64, will be included under respective heads.
• Step 3:      
• Set off of the losses if permissible, while aggregating the income under 5 heads of income.
• Step 4:      
• Carry forward and set off of the losses of past years, if permissible, from such income.
• Step 5:      
• The income computed under Steps 1 to 4 is known as Gross Total Income from which deductions under sections 80C to 80U (Chapter VIA) will be allowed.
• However, no deduction under these sections will be allowed from short-term capital gain covered under section 111A, any long-term capital gain and winning of lotteries, etc., though these incomes are part of gross total income.
• Step 6:      
• The balance income after allowing the deductions is known as total income which will be rounded off to the nearest Rs. 10.
• Step 7:      
• Compute tax on such Total Income at the prescribed rates of tax.
• Step 8:      
• Allow rebate of maximum Rs. 2,500 under section 87A in case of a resident individual having total income up to Rs. 3,50,000. For details see below.
• Step 9:      
• Add surcharge @ 10% on total income exceeding Rs. 50,00,000 and up to Rs. 1 crore and 15% of such income-tax in case of an individual having a total income exceeding Rs. 1 crore.
• Step 10:    
• Add education cess @ 2% and SHEC @ 1% on the tax (including surcharge if applicable).
• Step 11:    
• Allow relief under section 89, if any.
• Step 12:    
• Deduct the TDS, advance tax paid for the relevant assessment year, and double taxation relief under section 90, 90A, or 91.
• The balance is the net tax payable which will be rounded of the nearest ten rupees and must be paid as self-assessment tax before submitting the return of income.

Therefore, the correct sequence is:

1. Income under the different heads of income.
2. Adjustment of losses of the current year and earlier years.
3. Deduction from gross total income.
4. Rounding off.

Hence, Option1 is the correct answer.

According to Henry Fayol, “To manage is to forecast and plan, to organize, to command, & to control”. Whereas Luther Gullick has given a keyword ’POSDCORB’ where P stands for Planning, O for Organizing, S for Staffing, D for Directing, Co for Co-ordination, R for reporting & B for Budgeting. But the most widely accepted are functions of management given by KOONTZ and O'DONNELL i.e. Planning, Organizing, Staffing, Directing and Controlling.

The given options seem to be incorrect and hence we select the most appropriate option i.e. Option2.

• Planning means setting an organization’s goal and deciding how best to achieve them. Planning is decision making, regarding the goals and setting the future course of action from a set of alternatives to reach them. The plan helps to maintain managerial effectiveness as it works as a guide for the personnel for future activities. Selecting goals as well as the paths to achieve them is what planning involves.
• Organizing involves determining how activities and resources are to be assembled and coordinated. The organization can also be defined as an intentionally formalized structure of positions or roles for people to fill in an organization.
• Staffing helps the executives to establish positions and lay down their functional relations to each other. However, it is through a staffing function that different positions in the organizational structure are manned. The staffing process, therefore, provides the organization with adequate, competent, and qualified personnel at all levels.
• Directing motivates members of the organization to work in the best interests of the organization. Directing is said to be a process in which the managers instruct, guide, and oversee the performance of the workers to achieve predetermined goals. Directing is said to be the heart of the management process.
• Controlling is measuring, comparing, finding deviation, and correcting the organizational activities which are performed for achieving the goals or objectives. There are no guarantees that work will always proceed according to plan. It is this possibility of actions deviating from plans that call for constant monitoring of actual performance so that appropriate steps may be taken to make them conform to plans. Thus, the controlling task of management involves compelling the events to conform to plans.
• Coordinating deals with harmonizing work relations and efforts at all levels for achieving some common purpose. It may be described as unifying and achieving harmony among individual efforts for the purpose of accomplishing group goals. The whole idea of coordination is to adjust, reconcile, and synchronize individual efforts so that group efforts become more effective and help to achieve some common objectives.

A void contract, also known as a void agreement, is not actually a contract. A void contract cannot be enforced by law. For example, a contract to carry out illegal activity is a void contract or void agreement.   

Features of a void contract:

• A contract made by incompetent parties is void.
• Any contract with bilateral mistakes is void.
• Contracts that have unlawful object or consideration are void.
• Contract in restraint of marriage of any major person is void.
• Contract in restraint of trade is void.
• Contracts in restraint of legal proceedings are void.
• A contract the term of which is uncertain is void.
• A contract by way of the wager (gambling/betting) is void.
• A contract contingent upon the happening of an impossible event is void.
• A contract to do impossible acts is void.

Therefore, both statements are correct.

Keith Davis defined Workers' participation in management as “as an individual’s mental and emotional involvement in a group situation that encourages him to contribute to group goals and to share responsibility for them.”

Workers participation in management:

• It refers to the participation of non-managerial employees in the decision-making process of the organization.
• It refers to the involvement of workers only in such areas of activities of the enterprises where they can make some positive contribution.
• The areas of participation are of concern to the workers like wages, working conditions, safety, welfare, sharing of gain, production-related aspects, incentive, and allowances, etc. are legitimate areas of worker's concern and therefore workers must be consulted when these are determined.
• Workers may not be competent enough to understand and appreciate the managerial aspects of the enterprise so only those workers should be selected who possess the ability, intelligence, and knowledge so as to participate effectively in the management.
• Participation implies mental and emotional involvement.
• It motivates contribution as an opportunity is given to the workers to utilize their initiative and creativity towards the objectives of the organization.
• It encourages workers to take responsibility for activity as they are self-involved in the activities of an organization.

Therefore, both statements A and R are correct but R is the correct explanation of A.

Below is the explanation of the above-mentioned act:

1. Indian Contract Act, 1872:

• The Indian Contract Act, 1872 defines the term “Contract” under its section 2 (h) as “An agreement enforceable by law”. In other words, we can say that a contract is anything that is an agreement and enforceable by the law of the land.
• The objective of the Contract Act is to ensure that the rights and obligations arising out of a contract are honored and that legal remedies are made available to an aggrieved party against the party failing to honor his part of the agreement.

2. Right to Information Act 2005

• It mandates timely response to citizen requests for government information.
• The basic object of the Act is to empower the citizens, promote transparency and accountability in the working of the Government, contain corruption, and make our democracy work for the people in the real sense.
• It goes without saying that an informed citizen is better equipped to keep necessary vigil on the instruments of governance and make the government more accountable to the governed.
• The Act is a big step towards making the citizens informed about the activities of the Government.

3. Information Technology Act:

• It provides a legal framework for electronic governance by giving recognition to electronic records and digital signatures.
• It also defines cybercrimes and prescribes penalties for them.
• The Act directed the formation of a Controller of Certifying Authorities to regulate the issuance of digital signatures. It also established a Cyber Appellate Tribunal to resolve disputes arising from this new law.

4. Competition Act, 2002:

• The Competition Act, 2002 was enacted by the Parliament of India and governs Indian competition law.
• It replaced the archaic Monopolies and Restrictive Trade Practices Act, 1969. Under this legislation, the Competition Commission of India was established to prevent activities that have an adverse effect on competition in India. This act extends to the whole of India.
• It is a tool to implement and enforce competition policy and to prevent and punish anti-competitive business practices by firms and unnecessary Government interference in the market.

Therefore, the correct match is: