NTA UGC NET/JRF Exam, Dec. 2021/June 2022 (Commerce) Shift-I

Total Questions: 100

81. Residential status in Indian Income Tax Act is determined for which one of the following?

Correct Answer: (a) Previous year
Solution:

Under 6(1), an individual is said to be resident in India in any previous year, if he satisfies any of the following Basic conditions:
(i) He has been in India during the previous year for a total period 182 days or more,
or
(ii) He has been in India during the 4 years immediately preceding the previous year for a total period of 365 days or more and has been in India for at least 60 days in the previous year.

82. Which one of the following is a method of converting a non-productive, inactive asset (i.e. receivable) into a productive asset (viz. cash) by selling receivables to a company that specializes in their collection and administration?

Correct Answer: (d) Factoring
Solution:

Factoring is a unique financial innovation. It is both a financial as well as a management support to a client. It is a method of converting a non-productive inactive asset (viz. cash) by selling receivables to a company that specializes in their collection and administration.

83. Which one of the following is the Net Annual Value (NAV) of house for the given details?

Municipal value = Rs. 3,60,000
Fair Rental value = Rs. 4,00,000
Standard Rent = Rs. 5,00,000
Actual Rent (Annual Rent) = Rs. 4,80,000
Municipal Tax
(Due but not paid)

Correct Answer: (b) 4,80,000
Solution:

(A) Fair Rent       4,00,000
(B) Municipal Value  3,60,000
(C) Higher of A or B  4,00,000
(D) Standard Rent   5,00,000
(E) Expected Rent
  (Lower of C or D) 4,00,000
(F) Actual Rent    4,80,000

Gross Annual value (GAV)
(Higher of E or F)  4,80,000
Less ; Municipal Tax - Not paid

Net Annual value (NAV) 4,80,000

84. Which one of the following is an example of hybrid service offering?

Correct Answer: (c) Restaurant meal
Solution:

Hybrid businesses are companies which will be classified in addition to one sort of business. A restaurant, for instance, combines ingredients in making a fine meal (manufacturing), sells a chilled bottle of wine (merchandising), and fills customer orders (service).

85. Given below are two statements :

Statement I : Tax planning promotes professionalism and strengthens economic and political situation of the country
Statement II : Tax evasion is an act within the permissible range of the Act to achieve social and economic benefits
In the light of the above statements, choose the correct answer from the options given below :

Correct Answer: (c) Statement I is true but Statement II is false
Solution:

Statement-I : Tax planning promotes professionalism and strengthens economic and political situation of the country is true.
Statement-II : Tax evasion is an act within the permissible range of the act to achieve social and economic benefits.
Statement (II) is false because "Tax evasion is an illegal activity in which a person or entity deliberately avoids paying a true tax liability. It is a punishable offence which involves imprisonment & penalty."

86. If the firms are competitive and profit maximizing, determined by which one of the following is a/the opportunity cost of labour?

Statement I : Tax planning promotes professionalism and strengthens economic and political situation of the country
Statement II : Tax evasion is an act within the permissible range of the Act to achieve social and economic benefits
In the light of the above statements, choose the correct answer from the options given below :

Correct Answer: (b) the value of the marginal product of labour
Solution:If firms are competitive and profit maximizing, the demand curve for labour is determined by the value of the marginal product of labour. To maximize profit, firms hire labour until the marginal revenue product of labour is equal to the marginal cost.

87. In which one of the following modes of entry into foreign markets risk and profit potential are the highest?

Correct Answer: (c) Direct investment
Solution:

Direct Investment- Foreign Direct Investment (FDI's) risk and profit potential are the highest in the foreign markets.
Advantages
Directly invests in facilities in a foreign market. It requires a lot of capital to cover costs such as premises, technology and staff.
Disadvantages
High cost, high risk due to unknowns, slow entry due to setup time

88. A project requires an initial investment of Rs. 56,125 and its estimated salvage value is Rs. 3,000. The annual estimated income after depreciation and tax for its entire life of 5 years are Rs. 3,375, Rs. 5,375, Rs. 7,375, Rs. 9,375 and Rs. 11,375 respectively. Which one of the following is its average rate of return?

Correct Answer: (c) 29.94%
Solution:

Average rate of return

89. Which of the following affect the pricing of a currency option?

(A) Spot exchange rate
(B) Exercise rate
(C) Foreign risk-free rate of return
(D) Domestic risk-adjusted rate
(E) Time to expiration
Choose the correct answer from the options given below :

Correct Answer: (c) (A), (B), (C), (E) only
Solution:

Currency or FX option contract is a financial instrument that gives the holder the right, but not the obligation, to sell or buy currencies at a set price either on a specific date or before some expiration date.
Affected the pricing of a currency option:
• Spot exchange rate
• Exercise rate
• Foreign risk-free rate of return
• Time to expiration

90. Quotas which are the quantitative restrictions on exports/imports intended at protecting local industries and conserving foreign exchange, include which of the following?

(A) Single stage quota
(B) Absolute quota
(C) Tariff quotas
(D) Value added quotas
(E) Voluntary quotas
Choose the correct answer from the options given below :

Correct Answer: (a) (B), (C), (E) only
Solution:Quotas on imports or exports represent a type of Quantitative or Direct Trade restrictions. Quotas are restrictions imposed by one country on the volume and kind of goods that may be allowed to enter or leave that country while quotas are imposed on exports, their use is not common unlike Quota on imports.
Quotas are the quantitative restrictions on exports/imports:
• Absolute quota
• Tariff quotas
• Voluntary Quotas