Classical

December 2013 - Paper3

46:  
Financial leverage in a firm is positively affected by
A.

Intensity of tangible assets

B.

Operating leverage

C.

Profitability

D.

Tax Rate

 
 

Option: B

Explanation :


47:  
Which combination of the following two statements (A) and (R) is correct ?
Assertion (A) : The IRR of a project is the discount rate which reduces its NpV to zero.
Reason (R) : A projecr is worth accepting if the IRR exceeds the cost of capital. 
A.

(A) is right. but (R) is wrong.

B.

Both (A) and (R) are correct

C.

(A) is wrong, but (R) is correct

D.

Both (A) and (R) are wrong.

 
 

Option: C

Explanation :


48:  
Assertion (A) : A company should pay minimum dividend to its shareholders.
Reason (R) : Dividends heavily taxed than gains.
Codes:
 
A.

Both (A) and (R) are correct.

B.

Both (A) and (R) are incorrect.

C.
(A) is not correct, but (R) is correct
D.

(A) is correct, but (R) is wrong.

 
 

Option: B

Explanation :


49:  
Dividend irrelevance hypothesis is implied in the
A.

Traditional Model

B.

Walter Model

C.

Gordon Model

D.

M.M. Model

 
 

Option: C

Explanation :


50:  

Which one of the following does not serve the main objective of performance appraisal ?

A.

Developmental uses

B.

Administrative uses

C.

Ethical and moral values

D.

Organisational obiectives

 
 

Option: C

Explanation :




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