UGC NET/JRF EXAM, (MANAGEMENT) December 2019

Total Questions: 100

41. Pearl Ltd. Company purchased a van for Rs. 12,000 making a down payment of Rs. 5,000 cash and signing a Rs. 7,000 note payable in 60 days. As a result of this transaction:

(a) Total assets will increases by Rs. 12,000
(b) Total liabilities will increase by Rs. 7,000
(c) This transactions will not have immediate effect on owner's equity in the business
(d) From the point of view of short-term creditor, this transaction will make business more liquid

Choose the correct option :

Correct Answer: (d) (b) and (c)
Solution:Total assets will increase by 7000 (12000 - 5000).  And liabilities will increase by 7000.

42. The combined leverage

(a) is the summation of the degree of operating leverage and the financial leverage
(b) measures total risk of the firm
(c) is the difference between the degree of operating leverage and financial leverage
(d) indicates the effect that changes in sales will have on earning per share

Choose the correct option

Correct Answer: (c) (b) and (d)
Solution:The degree of combined leverage is a ratio that summarizes the effect of both operating and financial leverage. The ratio shows the percentage change earnings per share caused by 1% change in sales.

The combined leverage summarizes the effect of fixed operating costs and fixed financial costs on a company earnings per share. The ratio is a measure of the total risk of a business because it includes both operating and financial risk.

43. As per RBI guidelines (2008), an MSME is considered to have reached the stage of incipient sickness if the following events are triggered :

(a) When there are cost overruns because of delay in commencement of commercial production by more than 6 months
(b) The enterprise incurs losses for 2 years or cash loss for one year
(c) The capacity utilization is less than 50 percent of the projected level in term of sales
(d) There is an errosion in the net worth due to accumulated cash losses to the extent of 50 percent of net worth during the previous accounting year

Correct Answer: (b) (a), (b) and (c) only
Solution:As per RBI guidelines (2008), an MSME is considered to have reached the stage of incipient sickness if the following events are triggered-

(i) When the cost overruns because of the delay in commencement of commercial production by more then 6 month.

(ii) The enterprise incurs losses for 2 years or cash loss for one year.

(iii) The capacity utilization is less than 50% of the projected level in terms of sales.

44. Which of the following fully capture foreign exchange risk exposure of an manufacturing enterprise?

(a) Transaction exposure
(b) Economic exposure
(c) Translation exposure
(d) Currency exposure

Choose the correct option:

Correct Answer: (d) (a), (b)and (c) only
Solution:Foreign exchange exposure is classified into three types - Transaction, Translation and Economic exposure. Transaction exposures deals with actual foreign currency transaction.

Translation exposures deals with the accounting representation and economics exposures deals with little macro level exposures which may be true for the whole industry rather than just the firm under concern.

45. According to Mintzberg's model of strategic decision making, its modes are :

(a) Entrepreneurial adaptation and planning
(b) Managerial, incrementalisation and judgemental
(c) Entrepreneurial, planning and incrementalisation
(d) Judgemental, managerial and leadership

Which of the following options is correct?

Correct Answer: (b) (a)and (c) only
Solution:Henry Mintzberg's model has classified strategy decision- making into three different modes
(i) Entrepreneurial modes
(ii) Adaptive mode
(iii) Planning mode

There is a fourth approach - Logical incrementalism which has some characteristics of each of these three approach.

46. To keep the brand live, contemporary and relevant, marketer uses a variety of measures such as

(a) Brand extension
(b) Brand rejuvenation
(c) Brand relaunch
(d) Brand proliferation

Which of the following is correct?

Correct Answer: (c) (a), (b) and (c) only
Solution:To keep the brand live, contemporary and relevant, marketer uses a variety of measures such as:-

• Brand extension is an effective tool of brand management and is basically means extending a brand name to more production.

• The term Brand re-launch describes the restart or repositioning of a brand.

• Brand rejuvenation involves adding value to an existing brand by improving product attributes and enhancing its overall appeal.

47. Direct marketing is carried out in variety of ways. Some of the main forms of direct marketing are

(a) Mail order marketing
(b) Telemarketing
(c) Online marketing
(d) Direct selling

Which of the following option is correct?

Correct Answer: (a) (a), (b) and (c) only
Solution:The most common forms of direct marketing are -

(i) Internet marketing
(ii) Face-to-face marketing
(iii) Direct mail
(vi) Catalogs
(v) Telemarketing
(vi) Direct response advertising
(vii) Kiosk marketing

48. The Strategic issues to which a retailing firm has to respond are:

(a) Location decisions
(b) Brand building decisions
(c) Merchandise mix decisions
(d) Target market selection

Which of the following option is correct?

Correct Answer: (d) (a), (c) and (d) only
Solution:The Strategic issues to which a retailing firm has to respond are:-

• Location decisions have a major impact on a retail outlets success, as location is an important factor in customer store choice.

• Merchandise mix is essentially by the product assortment that a retail store offers. It refers to the breadth and depth of the product a given retail store carries on a regular basis.

• Target market is a group of customer within a business serviceable available market at which a business aims its marketing efforts and resources.

49. Grounds for market segmentation based behaviour are:

(a) Benefit sought
(b) Life style
(c) Purchase occasion
(d) Usage rate

Which of the following option is correct?

Correct Answer: (b) (a), (c) and (d) only
Solution:Grounds for market segmentation based behavior are:-

Behavioral Segmentation is the process of dividing the market into small homogenous groups based on the behavior the way they respond.

The types of Behavioral segmentation include Benefit sought that customer seeking during their Purchase occasion, usage rate, user status, brand loyalty etc's.

50. Which of the following describes a combination of manufacturing system designed to ensure that, theoretically, 100 percent good units flow to subsequent operations?

(a) Autonomation
(b) Automation
(c) Bakayoke
(d) Kaizen

Select correct option :

Correct Answer: (c) (a) and (c) only
Solution:Autonomation and Bokayoke descrebes a combination of manufacturing system designed to ensure that, theoretically, 100 percent good units flow to subsequent operations.

Autonomation is a feature of machine design, uses in Toyota production system (TPS) and lean manufacturing

Baka-yoke is autonomation, a term coined by Toyota to describe the 100% inspection of a product through automated means.