Assertion(A): The primary motive of a company in using financial leverage is to magnify shareholder’s return under favourable economic conditions Reason (R): To magnify shareholder’s return fixed charge funds can be obtained at a cost higher than the firm’s rate of return on net assets. Codes:  

A. An increase in current assets increases working capital B. An increase in current assets decreases working capital C. An increase in current liabilities decreases working capital D. An increase in current liabilities increases working capital Codes:

List  I List II (a) Hypothesis of Sales Turnover Maximisation (i)W.J.Baumol (b) Hypothesis of Maximisation of Firm’s Growth Rate (ii) Robin Marris (c) Hypothesis of Maximisation of Managerial Utility Function (iii) O.E.Williamson (d) Hypothesis of Satisfying Behaviour (iv) Cyert and March

Assertion (A): Form the marginal costing approach point of view, the marginal cost is compared with the purchase price. Reason (R): If the marginal cost is less than the purchase price it should be purchased rather than manufactured Codes:  

  List  I List II (a) Acid Test Ratio (i) Profitability analysis (b) Debt Service Coverage Ratio (ii) Activity analysis (c) Debt Equity Ratio (iii) Liquidity analysis (d) Stock Turnover Ratio (iv) Long-term solvency analysis