7. Ravi and Ishan are talking about Degree of Operating Leverage and Financial Leverage. Ravi says : Degree of Financial Leverage will be lower for firms with higher tax rates

Ishan says: Degree of Operating leverage will increase with sales

Only Ravi is correct

Only Ishan is correct

Both are incorrect

8. The total value of assets in a Balance sheet will increase in which of the following cases: (i) Ramesh exports bought a machine for Rs.50 mn. The transaction was funded by cash in bank account (ii) More Care Ltd bought a machine for Rs. 50 mn. The transaction was funded by a loan of Rs.50 mn (iii) Almighty Ltd bought a machine for Rs.50 mn. The transaction was funded by Rs.25 mn loan and Rs.25 mn of cash in bank account.

i,ii and iii

only ii and iii

only i and iii

9. Companies in an economy are in a process of reducing overtime, and some of the major firms have just decided to make a portion of the workforce temporary. Which of the following could be most likely happening to the inventory to sales ratio and the economic cycle

The inventory to sales ratio will be declining and the business cycle would be close to peaking

The inventory to sales ratio will be increasing and the business cycle would be close to peaking

The inventory to sales ratio will be declining and the business cycle would be close to bottoming