NTA UGC NET/JRF Exam, January 2025 (Commerce)

Total Questions: 100

61. Arrange the following steps in logical sequence regarding how to compute Net Present Value (NPV).

(a) Calculate Net Present Value (NPV) i.e. Present Value of all cash inflows - present value of all cash outflows
(b) Calculate all the cash outflows associated with the project
(c) Calculate all the cash inflows associated with the project
(d) Calculate the present value of all cash inflows associated with the project
(e) Calculate the present value of all cash outflows associated with the project Choose the correct answer from the options given below:

Correct Answer: B. (b), (с), (e), (d), (a)
Solution:(b) Calculate all the cash outflows associated with the project → Identify the total initial and recurring costs involved.
(c) Calculate all the cash inflows associated with the project→ Estimate future revenues and savings generated by the project.
(e) Calculate the present value of all cash outflows associated with the project → Discount future cash outflows to their present value using an appropriate discount rate.
(d) Calculate the present value of all cash inflows associated with the project → Similarly, discount all future cash inflows to their present value.
(a) Calculate Net Present Value (NPV) i.e., Present Value of all cash inflows Present Value of all cash outflows → Subtract total discounted outflows from discounted inflows.
If NPV > 0, the project is financially viable;
if NPV < 0, it should be rejected.

62. Arrange the following point (Section wise from Section 14 to 18) of the Indian Contract Act.

(a) Definition of free consent
(b) Misrepresentation
(c) Fraud
(d) Undue influence
(e) Coercion
Choose the correct answer from the options given below:

Correct Answer: D. (a), (e), (d), (c), (b)
Solution:(a) Definition of free consent (Section 14) A contract is valid only if both parties enter into it voluntarily, without coercion, .undue influence, fraud, or misrepresentation.
(e) Coercion (Section 15) The use of force or threats to make someone enter into a contract.
(d) Undue Influence (Section 16)→ One party unfairly exerts pressure or influence over another, affecting free consent.
(c) Fraud (Section 17) → Intentional misrepresentation or concealment of facts to deceive another party.
(b) Misrepresentation (Section 18) → False statements made without fraudulent intent, but still leading to an unfair contract.

63. Which one of the following refers to the firms investment in the current assets?

Correct Answer: A. Gross Working Capital
Solution:Gross Working Capital (GWC) refers to a firm's total investment in current assets. which include:
• Cash & Cash Equivalents
• Accounts Receivable
• Inventory
• Marketable Securities
Other options are incorrect:
• Net Working Capital (NWC) = Current Assets - Current Liabilities.
• Gross Current Liabilities refers only to short-term liabilities, not assets.
• Operating Cycle measures the time taken to convert inventory into cash.

64. Arrange the practical steps involved in the preparation of process account where there is work in progress.

(a) Prepare process account
(b) Prepare statement of Evaluation
(c) Prepare statement of cost per equivalent unit
(d) Prepare statement of equivalent production
(e) Determine and analyze the number of physical units in the form of inputs (transferred from previous process) and output
Choose the correct answer from the options given below:

Correct Answer: B. (e), (d), (c), (b), (a)
Solution:(e) Determine and analyze the number of physical units in the form of inputs (transferred from previous process) and output → Identify raw materials, labour, and overhead costs in production.
(d) Prepare statement of equivalent production→ Calculate the workin-progress (WIP) units to determine equivalent production.
(c) Prepare statement of cost per equivalent unit → Compute the cost per fully completed and WIP unit.
(b) Prepare statement of evaluation → Assign total production cost across completed and WIP units.
(a) Prepare process account → Summarize all transactions in a process account.

65. Which one of the following is value added service of EXIM Bank?

Correct Answer: C. Workshops and Seminars
Solution:EXIM Bank offers Workshops and Seminars as value-added services to:
• Educate exporters on international trade  finance.
• Train businesses on export credit risk management.
• Provide insights on global trade policies and documentation.
Other options are part of EXIM Bank's functions but not necessarily "value-added services":
• Export Facilitation → Supports exports through financing and guarantees.
• Export Product Development → Helps firms improve product quality for international markets.
• Export Marketing → Focuses on market expansion strategies for Indian exporters.

66. Arrange the following stages of conflict process in the proper sequence.

(a) Outcomes
(b) Potential opposition or incompatibility
(c) Behaviour
(d) Cognition and personalization
(e) Intentions
Choose the correct answer from the options given below:

Correct Answer: B. (b), (d), (e), (c), (a)
Solution:(b) Potential opposition or incompatibility → The first stage where conflict arises due to differences in goals, values, or communication gaps.
(d) Cognition and personalization→ The parties involved become aware of the conflict and start developing emotional responses toward it.
(e) Intentions → At this stage, individuals form strategies for dealing with conflict, whether competitive or cooperative.
(c) Behaviour → This is the actual expression of conflict, ranging from verbal disagreements to organizational disruptions.
(a) Outcomes → Conflict resolution leads to either a functional (positive) or dysfunctional (negative) outcome.

67. Which of the following statements are correct:

(a) Call-in-advance is the amount paid by the shareholders in excess of amount due from them.
(b) When the number of shares applied is more than the number of shares offered to the public for subscription, the issue is termed as under subscription.
(c) Section 49 of the Companies Act prohibits the issue of shares other than sweat equity shares at discount.
(d) Unless or until the fortified shares are re-issued, the balance on the shares fortified account will be deducted from the paid up capital.
(e) The securities premium is an amount in excess of nominal value of face value of the securities.
Choose the correct answer from the options given below:

Correct Answer: A. (a) and (e) only
Solution:(a) Call-in-advance is the amount paid by the shareholders in excess of the amount due from them → True, as shareholders sometimes pay additional amounts voluntarily before they are due.
(e) The securities premium is an amount in excess of the nominal value of face value of the securities → True, as per Section 52 of the Companies Act, 2013, securities premium is the extra amount received over and above the face value
(b) Incorrect → If applications exceed the shares offered, it is called oversubscription, not undersubscription.
(c) Incorrect → Section 53 of the Companies Act, 2013 prohibits issuing shares at a discount, except in specific cases like sweat equity shares.
(d) Incorrect → Forfeited shares are not deducted from paid-up capital until they are reissued. They are recorded as a separate account under reserves.

68. Which of the following research designs is the most precise one?

Correct Answer: A. Experimental
Solution:Experimental research design is the most precise because:
• It involves controlled experiments to establish cause-and-effect relationships. • Uses independent and dependent variables with minimal external influences. • Randomized trials and controlled settings enhance accuracy.
Other options are less precise:
• Exploratory→ Used for initial research, lacks precision.
• Diagnostic → Identifies causes but does not establish precise cause-effect relationships.
• Descriptive → Focuses on data collection without control over variables.

69. Which one of the following sections of the Income Tax Act, 1961 defines method for computing Arm Length Price?

Correct Answer: C. 92C
Solution:Section 92C of the Income Tax Act, 1961 defines methods for computing the Arm's Length Price (ALP) in international transactions. ALP is used for transfer pricing regulations to ensure that transactions between associated enterprises are fair and comparable to market rates.
Methods under Section 92C include:
• Comparable Uncontrolled Price (CUP) Method
• Resale Price Method (RPM)
• Cost Plus Method (СPМ)
• Profit Split Method (PSM)
• Transactional Net Margin Method (TNMM)

70. Which of the following is a situation of adverse balance of trade?

Correct Answer: A. Import more than exports
Solution:Adverse Balance of Trade occurs when a country imports more than it exports, leading to a trade deficit.
It indicates higher dependency on foreign goods and can affect the country's foreign exchange reserves and currency value.
Other options are incorrect:
• Exports more than imports → Leads to trade surplus (positive balance of trade).
• Exports equal to imports → Creates a balanced trade situation.
• Export surplus → Means exports exceed imports, which is not an adverse balance.