Posts

Showing posts from February 23, 2026

Chapter 9: Index Numbers – Questions & Answers

📌 Part A – 1 Mark Questions (Very Short Answer) What are index numbers? Index numbers are special averages that measure changes in variables like price, quantity, or value over time. Index numbers are also called ________. Economic barometers. Name one use of index numbers. They help measure the purchasing power of money. What is the base year? The base year is the reference year against which changes in the current year are compared. What is the formula for Simple Aggregate Price Index? P₀₁ = (ΣP₁ / ΣP₀) × 100, where P₁ = current year prices, P₀ = base year prices. What is the formula for Laspeyre's Price Index? P₀₁ = (ΣP₁Q₀ / ΣP₀Q₀) × 100, where Q₀ = base year quantities. Which index uses base year quantities as weights? Laspeyre's Price Index. What does a price index of 125 mean? It means prices have increased by 25% compared to the base year. What is the purpose of Dearness Allowance (DA)? DA is given to employees to compensate for the rise in prices, and it is ...

Chapter 8: Correlation – Questions & Answers

📌 Part A – 1 Mark Questions (Very Short Answer) What is correlation? Correlation means the relationship between two or more variables. Define positive correlation. When one variable increases, the other also increases. Both move in the same direction. Define negative correlation. When one variable increases, the other decreases. They move in opposite directions. What is simple correlation? Simple correlation means relationship between only two variables. What is multiple correlation? Multiple correlation means relationship between one variable and a number of other variables. What is partial correlation? Partial correlation means relationship between two variables, keeping the influence of other variables constant. What is perfect correlation? When change in one variable results in change in another variable at the same rate, it is perfect correlation. What is imperfect correlation? When change in one variable results in change in another variable at different rates, it is i...

Chapter 7: Measures of Dispersion – Questions & Answers

📌 Part A – 1 Mark Questions (Very Short Answer) What is dispersion? Dispersion measures the degree of variation or spread in a data set. Define Range. Range is the difference between the highest and lowest value in a series. Write the formula for Range. Range = L – S, where L = Largest value, S = Smallest value. Write the formula for Coefficient of Range. Coefficient of Range = (L – S) / (L + S). What is Quartile Deviation? Quartile Deviation is half the difference between the third quartile (Q₃) and the first quartile (Q₁). Write the formula for Quartile Deviation (QD). QD = (Q₃ – Q₁) / 2. Write the formula for Coefficient of Quartile Deviation. Coefficient of QD = (Q₃ – Q₁) / (Q₃ + Q₁). What does a low dispersion indicate? Low dispersion means data points are close to the average, so the average is more reliable. What does a high dispersion indicate? High dispersion means data points are spread far from the average, so the average is less reliable. Which measure of disp...

Chapter 6: Measures of Central Tendency – Questions & Answers

📌 Part A – 1 Mark Questions (Very Short Answer) What is a measure of central tendency? A measure of central tendency is a single value that represents the entire data set. Why do we use measures of central tendency? (Give one reason) To find a representative value for the whole data. What is arithmetic mean? Arithmetic mean is the sum of all values divided by the number of values. What is median? Median is the middle value when data is arranged in order. What is mode? Mode is the value that appears most often in a data set. Median is also called ________. Positional average. Write the formula for arithmetic mean in individual series. Mean = ΣX / N, where ΣX = sum of values, N = number of items. What are quartiles? Quartiles are values that divide a series into four equal parts. What are deciles? Deciles are values that divide a series into ten equal parts. What are percentiles? Percentiles are values that divide a series into one hundred equal parts. Which quartile is equa...

Chapter 5: Quality Management – Questions & Answers

📌 Part A – 1 Mark Questions (Very Short Answer) What is quality? Quality refers to the features that make a product or service good or bad. Who defined the five approaches to quality? Professor David Garvin. Who defined the eight dimensions of product quality? David Garvin. What is the transcendental view of quality? It means quality cannot be defined exactly; we know it when we see it. According to which view is quality based on customer satisfaction? User-based view. What is the manufacturing-based view of quality? Quality means following design specifications correctly during production. What does SERVQUAL stand for? It is a model to measure service quality with five dimensions. Name the five SERVQUAL dimensions. Tangibles, Reliability, Responsiveness, Assurance, Empathy. What does TQM stand for? Total Quality Management. What is quality management? It means overseeing all activities to maintain excellence in products or services. Name the four main components of qualit...

Chapter 4: Production and Operations Management – Questions & Answers

📌 Part A – 1 Mark Questions (Very Short Answer) What is production management? Production management means managing the process of converting raw materials into finished goods. What is the difference between production and operations? Production makes tangible goods (like cars). Operations provide services (like banking). Who makes strategic decisions? Top level management makes strategic decisions. Who makes tactical decisions? Middle level management makes tactical decisions. Who makes operational decisions? Lower level management or floor managers make operational decisions. What are strategic decisions? Give an example. Strategic decisions are long-term plans for 5+ years. Example: Building a new factory. What are operational decisions? Give an example. Operational decisions are daily plans. Example: Deciding today’s worker schedule. What is plant location? Plant location means deciding where to place a factory or business facility. What is plant layout? Plant layout is ...

Chapter 3: Long Run Investment Decision – Capital Budgeting – Questions & Answers

📌 Part A – 1 Mark Questions (Very Short Answer) What is capital budgeting? Capital budgeting is the process of making decisions about long-term investments in fixed assets. Give another name for capital budgeting. Long-term investment decision or capital expenditure decision. What is Payback Period (PBP)? Payback Period is the time taken to recover the original cost of an investment. What is ARR? ARR (Accounting Rate of Return) is the average annual profit divided by the average investment. What is Net Present Value (NPV)? NPV is the difference between the present value of cash inflows and the present value of cash outflows. Write the formula for Profitability Index (PI). PI = Total discounted cash inflows ÷ Initial cash outlay. What is Internal Rate of Return (IRR)? IRR is the discount rate at which the Net Present Value of an investment becomes zero. If NPV is greater than zero, should we accept or reject the project? Accept the project. If PI is less than 1, should we acc...

Chapter 2: Working Capital Management – Questions & Answers

📌 Part A – 1 Mark Questions (Very Short Answer) What is working capital? Working capital is the money a business needs for its day-to-day expenses. What is fixed capital? The investment made in long-term assets like land and machinery is called fixed capital. Define Gross Working Capital. Gross Working Capital is the total of all current assets of a business. Define Net Working Capital. Net Working Capital is Current Assets minus Current Liabilities. What is fixed working capital? It is the minimum amount of current assets always needed for normal business operations. What is temporary or variable working capital? It is the extra working capital required to meet seasonal or special demands. What is the working capital cycle? It is the cycle that starts with buying raw materials and ends with getting cash from sales. According to which approach are all current assets financed from long-term sources? The Conservative approach. According to which approach are all current assets...