Mukesh sold a cow to Rakesh at 20% profit. Rakesh sold it to Mahesh at 25% profit. Mahesh sold it to Mona at 10% profit. If Mona paid Rs. 990 for the cow then at what price Mukesh purchased it ?

A hockey team has 14 players including two goalkeepers. In how many ways can playing eleven be selected ?

A group of 15 members have the average age of 15 years. First 5 members among them have the average age of 14 years and after that 9 members have the average age of 16 years. What is the age of 15th member?

1. 

2. 

3. 

4. 

5.  

A committee of 5 persons is to be formed from 5 men and 4 women. What is the Probability of having at least 3 men in the committee ?

If a person reduces his speed by 2/3 of his normal speed then he takes one hour more in walking certain distance. The time (in hours) to cover the distance with normal speed is

A person left Rs. 8,600 for his 5 sons, 4 daughters and 2 nephews. If amount received by each daughter is four times that of each nephew and amount received by each son is five times that of each nephew, then what will be the share of each daughter ?

A sum of money amounts to Rs. 6,000 in 5 years and to Rs. 8,000 in 10 years at a compound interest rate per annum. What is the sum?

It takes 8 hours to fill a tank in normal condition but due leakage in the bottom of the tank it take 2 hours more. If the tank is completely filled then how much time it will take in emptying the tank due to leakage ?

An article was sold for Rs. 144. If the percentage of profit was numerically equal to the cost price, then what is the cost of article ?

Two trains are travelling in same direction with speeds 120 kmph and 180 kmph respectively. The faster train completely passes a man sit in the slower train in 18 seconds. Find the length of the faster train.

The following line graph gives the annual percent profit earned by two companies during the period 2012-2017. Study the graph and answer the questions based on it.
Percent profit earned by two companies over the years

What is the ratio of the profit of company X to profit of company Y in 2017, if ratio of the income of company X to Y is 7:8 in the same year?

The following line graph gives the annual percent profit earned by two companies during the period 2012-2017. Study the graph and answer the questions based on it.
Percent profit earned by two companies over the years

If in year 2014, the expenditure made by company X was Rs. 5 lakhs, then what was the income of company X in that year?

The following line graph gives the annual percent profit earned by two companies during the period 2012-2017. Study the graph and answer the questions based on it.
Percent profit earned by two companies over the years

If in year 2016 the income of company X and Y was Rs. 18.7 lakhs and Rs. 20.3 lakhs respectively, the expenditure of company Y is approximately what percent more or less than that of company X in that year?

The following line graph gives the annual percent profit earned by two companies during the period 2012-2017. Study the graph and answer the questions based on it.
Percent profit earned by two companies over the years

If the income of company Y remains same throughout the years i.e Rs. 3.4 lakhs then in which year his expenditure was minimum and what was the expenditure in that year?

The following line graph gives the annual percent profit earned by two companies during the period 2012-2017. Study the graph and answer the questions based on it.
Percent profit earned by two companies over the years

1. 

2. 

3. 

4. 

5.  

Study the following information carefully to answer the given questions

In a family, there are eight members S, V, B, I, R, E, O and A are seating around a circular table, facing the centre but not necessarily in the same order. Each of them likes a different cartoon characters – Pink Panther, Daffy, Tom, Jerry , Coyote , Tweety, Road Runner and Homer Simpson.
There are two persons between the persons who like Pink Panther and Daffy and neither of them sits opposite to S. B and E are not immediate neighbours and neither of them likes Homer Simpson or Daffy. S, who likes Road Runner, sits second to the right of the one,who likes Homer Simpson. V and R neither like Homer Simpson nor sit adjacent to S. R, who likes Daffy, sits second to the left of O, who likes Jerry . B does not like Pink Panther. The immediate neighbour of R faces B, who sits third to the left of the one ,who likes Road Runner. E does not like Homer Simpson. Both I and A do not like Pink Panther and Tom. V likes Tweety while I likes Coyote. V is not an immediate neighbour of S.

Who amongst the following is the favourite cartoon character of A?

Study the following information carefully to answer the given questions

In a family, there are eight members S, V, B, I, R, E, O and A are seating around a circular table, facing the centre but not necessarily in the same order. Each of them likes a different cartoon characters – Pink Panther, Daffy, Tom, Jerry , Coyote , Tweety, Road Runner and Homer Simpson.
There are two persons between the persons who like Pink Panther and Daffy and neither of them sits opposite to S. B and E are not immediate neighbours and neither of them likes Homer Simpson or Daffy. S, who likes Road Runner, sits second to the right of the one,who likes Homer Simpson. V and R neither like Homer Simpson nor sit adjacent to S. R, who likes Daffy, sits second to the left of O, who likes Jerry . B does not like Pink Panther. The immediate neighbour of R faces B, who sits third to the left of the one ,who likes Road Runner. E does not like Homer Simpson. Both I and A do not like Pink Panther and Tom. V likes Tweety while I likes Coyote. V is not an immediate neighbour of S.

Tom is the favourite cartoon character of which of the following persons?

Study the following information carefully to answer the given questions

In a family, there are eight members S, V, B, I, R, E, O and A are seating around a circular table, facing the centre but not necessarily in the same order. Each of them likes a different cartoon characters – Pink Panther, Daffy, Tom, Jerry , Coyote , Tweety, Road Runner and Homer Simpson.
There are two persons between the persons who like Pink Panther and Daffy and neither of them sits opposite to S. B and E are not immediate neighbours and neither of them likes Homer Simpson or Daffy. S, who likes Road Runner, sits second to the right of the one,who likes Homer Simpson. V and R neither like Homer Simpson nor sit adjacent to S. R, who likes Daffy, sits second to the left of O, who likes Jerry . B does not like Pink Panther. The immediate neighbour of R faces B, who sits third to the left of the one ,who likes Road Runner. E does not like Homer Simpson. Both I and A do not like Pink Panther and Tom. V likes Tweety while I likes Coyote. V is not an immediate neighbour of S.

Who among the following sits exactly between S and A?

Study the following information carefully to answer the given questions

In a family, there are eight members S, V, B, I, R, E, O and A are seating around a circular table, facing the centre but not necessarily in the same order. Each of them likes a different cartoon characters – Pink Panther, Daffy, Tom, Jerry , Coyote , Tweety, Road Runner and Homer Simpson.
There are two persons between the persons who like Pink Panther and Daffy and neither of them sits opposite to S. B and E are not immediate neighbours and neither of them likes Homer Simpson or Daffy. S, who likes Road Runner, sits second to the right of the one,who likes Homer Simpson. V and R neither like Homer Simpson nor sit adjacent to S. R, who likes Daffy, sits second to the left of O, who likes Jerry . B does not like Pink Panther. The immediate neighbour of R faces B, who sits third to the left of the one ,who likes Road Runner. E does not like Homer Simpson. Both I and A do not like Pink Panther and Tom. V likes Tweety while I likes Coyote. V is not an immediate neighbour of S.

Which of the following statements is/are true about V?

Study the following information carefully to answer the given questions

In a family, there are eight members S, V, B, I, R, E, O and A are seating around a circular table, facing the centre but not necessarily in the same order. Each of them likes a different cartoon characters – Pink Panther, Daffy, Tom, Jerry , Coyote , Tweety, Road Runner and Homer Simpson.
There are two persons between the persons who like Pink Panther and Daffy and neither of them sits opposite to S. B and E are not immediate neighbours and neither of them likes Homer Simpson or Daffy. S, who likes Road Runner, sits second to the right of the one,who likes Homer Simpson. V and R neither like Homer Simpson nor sit adjacent to S. R, who likes Daffy, sits second to the left of O, who likes Jerry . B does not like Pink Panther. The immediate neighbour of R faces B, who sits third to the left of the one ,who likes Road Runner. E does not like Homer Simpson. Both I and A do not like Pink Panther and Tom. V likes Tweety while I likes Coyote. V is not an immediate neighbour of S.

Four of the following five are alike in a certain way based on the given arrangement and thus form a group. Which of the following does not belong to that group?

Study the following arrangement carefully and answer the questions given below:

How many such symbols are there in the above arrangement, each of which is immediately preceded by a number and immediately followed by a vowel ?

Study the following arrangement carefully and answer the questions given below:

Four of the following five are alike in a certain way based on their positions in the above arrangement and so form a group. Which is the one that does not belong to that group?

Study the following arrangement carefully and answer the questions given below:

If all the symbol in the above arrangement are dropped, which of the following element will be the twelfth from the right end?

Study the following arrangement carefully and answer the questions given below:

If all the numbers in the above arrangement is dropped, which of the following element will be the ninth from the left end?

Study the following arrangement carefully and answer the questions given below:

Which of the following element is the sixth to the right of the twelfth from the right end of the above arrangement?

Read the passage carefully and answer the questions given below it. Certain words/ phrases are given in bold to help you locate them while answering some of the questions.

Though cash is king in business, it is the simplest item to value under any method of valuation. To value cash there is no need to use complex methodologies such as discounted cash flow (DCF) or to make complex assumptions such as growth rate or discount rate. Nor do you need expert valuers (like you need for valuation of fixed assets like land and buildings). The general assumption is cash is always valued at face value.
The current controversy on valuation in the proposed merger of Cairn India with Vedanta Resources centres on valuation of cash and raises a doubt about the above principle of valuation of cash.
Valuing cash at face value may not be valid in some exceptional circumstances. While valuing the company or shares, if the company has cash surplus of a normal magnitude the recommended method is to value the business and add the; cash surplus at face value to arrive at the total value of the company.
Then the question arises what is to be done in case the cash surplus is large. Before answering this we need clarity on what the definition of large cash surplus is.
When the surplus generated is held as cash in the normal course of business cycle or accumulated and held temporarily as cash to meet a large defined investment within a short period of time (say maximum of two or three years) then such cash fall within the definition of normal cash surplus to be valued at face value.
In the case of Cairn, cash is about one third of book value, which doesn’t come under the definition of cash surplus in the normal course of operation. Hence in this case cash can he valued a face value only if it is held for a specific identified investment to be made within a few years and the business valuation factors the financial benefit flowing from such identified investment.
There is also a possible exception to this rule of valuation, i.e. valuing large cash surplus at face value without a specific investment plan.
This exception applies when the price consideration of the company or share with large cash surplus is paid to the current owner in cash. In this case the seller sells cash for cash and hence it is fair to value cash at face value irrespective of the size of cash surplus and there is no need for investment plan for large surplus cash
In case of valuation for mergers, the above exemption can’t apply as the shareholders of the merging company generally get shares, and not cash.
Maybe in recognition of this principle, the merger scheme of Cairn with Vedanta provides for some cash (in the form of short-term security) component in the swap ratio offered to Cairn shareholders. Despite this, some minority shareholders of Cairn object to the valuation, possibly because this portion of compensation is less than 20 per cent of cash surplus of Cairn.
Then comes the complex question of how to value cash, which is larger than cash surplus in the normal course of business, nor held for a specific investment and the consideration for transfer of cash is not paid in cash.
The cash in this case is to be valued based on opportunistic value for the seller and the alternative cost of raising such cash for the buyer.
Both these values are extremely subjective and vaguer than well-defined methods of valuations such as DCF, profit multiple or replacement value. Hence, they will always be subject to controversies.

How is the total value of a company with cash surplus of a normal magnitude arrived at? Answer in the context of the passage.

Read the passage carefully and answer the questions given below it. Certain words/ phrases are given in bold to help you locate them while answering some of the questions.

Though cash is king in business, it is the simplest item to value under any method of valuation. To value cash there is no need to use complex methodologies such as discounted cash flow (DCF) or to make complex assumptions such as growth rate or discount rate. Nor do you need expert valuers (like you need for valuation of fixed assets like land and buildings). The general assumption is cash is always valued at face value.
The current controversy on valuation in the proposed merger of Cairn India with Vedanta Resources centres on valuation of cash and raises a doubt about the above principle of valuation of cash.
Valuing cash at face value may not be valid in some exceptional circumstances. While valuing the company or shares, if the company has cash surplus of a normal magnitude the recommended method is to value the business and add the; cash surplus at face value to arrive at the total value of the company.
Then the question arises what is to be done in case the cash surplus is large. Before answering this we need clarity on what the definition of large cash surplus is.
When the surplus generated is held as cash in the normal course of business cycle or accumulated and held temporarily as cash to meet a large defined investment within a short period of time (say maximum of two or three years) then such cash fall within the definition of normal cash surplus to be valued at face value.
In the case of Cairn, cash is about one third of book value, which doesn’t come under the definition of cash surplus in the normal course of operation. Hence in this case cash can he valued a face value only if it is held for a specific identified investment to be made within a few years and the business valuation factors the financial benefit flowing from such identified investment.
There is also a possible exception to this rule of valuation, i.e. valuing large cash surplus at face value without a specific investment plan.
This exception applies when the price consideration of the company or share with large cash surplus is paid to the current owner in cash. In this case the seller sells cash for cash and hence it is fair to value cash at face value irrespective of the size of cash surplus and there is no need for investment plan for large surplus cash
In case of valuation for mergers, the above exemption can’t apply as the shareholders of the merging company generally get shares, and not cash.
Maybe in recognition of this principle, the merger scheme of Cairn with Vedanta provides for some cash (in the form of short-term security) component in the swap ratio offered to Cairn shareholders. Despite this, some minority shareholders of Cairn object to the valuation, possibly because this portion of compensation is less than 20 per cent of cash surplus of Cairn.
Then comes the complex question of how to value cash, which is larger than cash surplus in the normal course of business, nor held for a specific investment and the consideration for transfer of cash is not paid in cash.
The cash in this case is to be valued based on opportunistic value for the seller and the alternative cost of raising such cash for the buyer.
Both these values are extremely subjective and vaguer than well-defined methods of valuations such as DCF, profit multiple or replacement value. Hence, they will always be subject to controversies.

What is/are the different methods of valuing cash?

(A) Growth rate method
(B) Discounted cash flow method
(C) Discount rate method

Read the passage carefully and answer the questions given below it. Certain words/ phrases are given in bold to help you locate them while answering some of the questions.

Though cash is king in business, it is the simplest item to value under any method of valuation. To value cash there is no need to use complex methodologies such as discounted cash flow (DCF) or to make complex assumptions such as growth rate or discount rate. Nor do you need expert valuers (like you need for valuation of fixed assets like land and buildings). The general assumption is cash is always valued at face value.
The current controversy on valuation in the proposed merger of Cairn India with Vedanta Resources centres on valuation of cash and raises a doubt about the above principle of valuation of cash.
Valuing cash at face value may not be valid in some exceptional circumstances. While valuing the company or shares, if the company has cash surplus of a normal magnitude the recommended method is to value the business and add the; cash surplus at face value to arrive at the total value of the company.
Then the question arises what is to be done in case the cash surplus is large. Before answering this we need clarity on what the definition of large cash surplus is.
When the surplus generated is held as cash in the normal course of business cycle or accumulated and held temporarily as cash to meet a large defined investment within a short period of time (say maximum of two or three years) then such cash fall within the definition of normal cash surplus to be valued at face value.
In the case of Cairn, cash is about one third of book value, which doesn’t come under the definition of cash surplus in the normal course of operation. Hence in this case cash can he valued a face value only if it is held for a specific identified investment to be made within a few years and the business valuation factors the financial benefit flowing from such identified investment.
There is also a possible exception to this rule of valuation, i.e. valuing large cash surplus at face value without a specific investment plan.
This exception applies when the price consideration of the company or share with large cash surplus is paid to the current owner in cash. In this case the seller sells cash for cash and hence it is fair to value cash at face value irrespective of the size of cash surplus and there is no need for investment plan for large surplus cash
In case of valuation for mergers, the above exemption can’t apply as the shareholders of the merging company generally get shares, and not cash.
Maybe in recognition of this principle, the merger scheme of Cairn with Vedanta provides for some cash (in the form of short-term security) component in the swap ratio offered to Cairn shareholders. Despite this, some minority shareholders of Cairn object to the valuation, possibly because this portion of compensation is less than 20 per cent of cash surplus of Cairn.
Then comes the complex question of how to value cash, which is larger than cash surplus in the normal course of business, nor held for a specific investment and the consideration for transfer of cash is not paid in cash.
The cash in this case is to be valued based on opportunistic value for the seller and the alternative cost of raising such cash for the buyer.
Both these values are extremely subjective and vaguer than well-defined methods of valuations such as DCF, profit multiple or replacement value. Hence, they will always be subject to controversies.

Which of the following is not true in the context of the given passage?

Read the passage carefully and answer the questions given below it. Certain words/ phrases are given in bold to help you locate them while answering some of the questions.

Though cash is king in business, it is the simplest item to value under any method of valuation. To value cash there is no need to use complex methodologies such as discounted cash flow (DCF) or to make complex assumptions such as growth rate or discount rate. Nor do you need expert valuers (like you need for valuation of fixed assets like land and buildings). The general assumption is cash is always valued at face value.
The current controversy on valuation in the proposed merger of Cairn India with Vedanta Resources centres on valuation of cash and raises a doubt about the above principle of valuation of cash.
Valuing cash at face value may not be valid in some exceptional circumstances. While valuing the company or shares, if the company has cash surplus of a normal magnitude the recommended method is to value the business and add the; cash surplus at face value to arrive at the total value of the company.
Then the question arises what is to be done in case the cash surplus is large. Before answering this we need clarity on what the definition of large cash surplus is.
When the surplus generated is held as cash in the normal course of business cycle or accumulated and held temporarily as cash to meet a large defined investment within a short period of time (say maximum of two or three years) then such cash fall within the definition of normal cash surplus to be valued at face value.
In the case of Cairn, cash is about one third of book value, which doesn’t come under the definition of cash surplus in the normal course of operation. Hence in this case cash can he valued a face value only if it is held for a specific identified investment to be made within a few years and the business valuation factors the financial benefit flowing from such identified investment.
There is also a possible exception to this rule of valuation, i.e. valuing large cash surplus at face value without a specific investment plan.
This exception applies when the price consideration of the company or share with large cash surplus is paid to the current owner in cash. In this case the seller sells cash for cash and hence it is fair to value cash at face value irrespective of the size of cash surplus and there is no need for investment plan for large surplus cash
In case of valuation for mergers, the above exemption can’t apply as the shareholders of the merging company generally get shares, and not cash.
Maybe in recognition of this principle, the merger scheme of Cairn with Vedanta provides for some cash (in the form of short-term security) component in the swap ratio offered to Cairn shareholders. Despite this, some minority shareholders of Cairn object to the valuation, possibly because this portion of compensation is less than 20 per cent of cash surplus of Cairn.
Then comes the complex question of how to value cash, which is larger than cash surplus in the normal course of business, nor held for a specific investment and the consideration for transfer of cash is not paid in cash.
The cash in this case is to be valued based on opportunistic value for the seller and the alternative cost of raising such cash for the buyer.
Both these values are extremely subjective and vaguer than well-defined methods of valuations such as DCF, profit multiple or replacement value. Hence, they will always be subject to controversies.

What is the possible exception to the rule of valuation?

Read the passage carefully and answer the questions given below it. Certain words/ phrases are given in bold to help you locate them while answering some of the questions.

Though cash is king in business, it is the simplest item to value under any method of valuation. To value cash there is no need to use complex methodologies such as discounted cash flow (DCF) or to make complex assumptions such as growth rate or discount rate. Nor do you need expert valuers (like you need for valuation of fixed assets like land and buildings). The general assumption is cash is always valued at face value.
The current controversy on valuation in the proposed merger of Cairn India with Vedanta Resources centres on valuation of cash and raises a doubt about the above principle of valuation of cash.
Valuing cash at face value may not be valid in some exceptional circumstances. While valuing the company or shares, if the company has cash surplus of a normal magnitude the recommended method is to value the business and add the; cash surplus at face value to arrive at the total value of the company.
Then the question arises what is to be done in case the cash surplus is large. Before answering this we need clarity on what the definition of large cash surplus is.
When the surplus generated is held as cash in the normal course of business cycle or accumulated and held temporarily as cash to meet a large defined investment within a short period of time (say maximum of two or three years) then such cash fall within the definition of normal cash surplus to be valued at face value.
In the case of Cairn, cash is about one third of book value, which doesn’t come under the definition of cash surplus in the normal course of operation. Hence in this case cash can he valued a face value only if it is held for a specific identified investment to be made within a few years and the business valuation factors the financial benefit flowing from such identified investment.
There is also a possible exception to this rule of valuation, i.e. valuing large cash surplus at face value without a specific investment plan.
This exception applies when the price consideration of the company or share with large cash surplus is paid to the current owner in cash. In this case the seller sells cash for cash and hence it is fair to value cash at face value irrespective of the size of cash surplus and there is no need for investment plan for large surplus cash
In case of valuation for mergers, the above exemption can’t apply as the shareholders of the merging company generally get shares, and not cash.
Maybe in recognition of this principle, the merger scheme of Cairn with Vedanta provides for some cash (in the form of short-term security) component in the swap ratio offered to Cairn shareholders. Despite this, some minority shareholders of Cairn object to the valuation, possibly because this portion of compensation is less than 20 per cent of cash surplus of Cairn.
Then comes the complex question of how to value cash, which is larger than cash surplus in the normal course of business, nor held for a specific investment and the consideration for transfer of cash is not paid in cash.
The cash in this case is to be valued based on opportunistic value for the seller and the alternative cost of raising such cash for the buyer.
Both these values are extremely subjective and vaguer than well-defined methods of valuations such as DCF, profit multiple or replacement value. Hence, they will always be subject to controversies.

What is the intention of the author behind writing this passage?

Read the passage carefully and answer the questions given below it. Certain words/ phrases are given in bold to help you locate them while answering some of the questions.

Though cash is king in business, it is the simplest item to value under any method of valuation. To value cash there is no need to use complex methodologies such as discounted cash flow (DCF) or to make complex assumptions such as growth rate or discount rate. Nor do you need expert valuers (like you need for valuation of fixed assets like land and buildings). The general assumption is cash is always valued at face value.
The current controversy on valuation in the proposed merger of Cairn India with Vedanta Resources centres on valuation of cash and raises a doubt about the above principle of valuation of cash.
Valuing cash at face value may not be valid in some exceptional circumstances. While valuing the company or shares, if the company has cash surplus of a normal magnitude the recommended method is to value the business and add the; cash surplus at face value to arrive at the total value of the company.
Then the question arises what is to be done in case the cash surplus is large. Before answering this we need clarity on what the definition of large cash surplus is.
When the surplus generated is held as cash in the normal course of business cycle or accumulated and held temporarily as cash to meet a large defined investment within a short period of time (say maximum of two or three years) then such cash fall within the definition of normal cash surplus to be valued at face value.
In the case of Cairn, cash is about one third of book value, which doesn’t come under the definition of cash surplus in the normal course of operation. Hence in this case cash can he valued a face value only if it is held for a specific identified investment to be made within a few years and the business valuation factors the financial benefit flowing from such identified investment.
There is also a possible exception to this rule of valuation, i.e. valuing large cash surplus at face value without a specific investment plan.
This exception applies when the price consideration of the company or share with large cash surplus is paid to the current owner in cash. In this case the seller sells cash for cash and hence it is fair to value cash at face value irrespective of the size of cash surplus and there is no need for investment plan for large surplus cash
In case of valuation for mergers, the above exemption can’t apply as the shareholders of the merging company generally get shares, and not cash.
Maybe in recognition of this principle, the merger scheme of Cairn with Vedanta provides for some cash (in the form of short-term security) component in the swap ratio offered to Cairn shareholders. Despite this, some minority shareholders of Cairn object to the valuation, possibly because this portion of compensation is less than 20 per cent of cash surplus of Cairn.
Then comes the complex question of how to value cash, which is larger than cash surplus in the normal course of business, nor held for a specific investment and the consideration for transfer of cash is not paid in cash.
The cash in this case is to be valued based on opportunistic value for the seller and the alternative cost of raising such cash for the buyer.
Both these values are extremely subjective and vaguer than well-defined methods of valuations such as DCF, profit multiple or replacement value. Hence, they will always be subject to controversies.

Choose the word/group of words which isMOST SIMILAR in meaning to the word/ group of words printed in bold as used in the passage.

Exemption

Read the passage carefully and answer the questions given below it. Certain words/ phrases are given in bold to help you locate them while answering some of the questions.

Though cash is king in business, it is the simplest item to value under any method of valuation. To value cash there is no need to use complex methodologies such as discounted cash flow (DCF) or to make complex assumptions such as growth rate or discount rate. Nor do you need expert valuers (like you need for valuation of fixed assets like land and buildings). The general assumption is cash is always valued at face value.
The current controversy on valuation in the proposed merger of Cairn India with Vedanta Resources centres on valuation of cash and raises a doubt about the above principle of valuation of cash.
Valuing cash at face value may not be valid in some exceptional circumstances. While valuing the company or shares, if the company has cash surplus of a normal magnitude the recommended method is to value the business and add the; cash surplus at face value to arrive at the total value of the company.
Then the question arises what is to be done in case the cash surplus is large. Before answering this we need clarity on what the definition of large cash surplus is.
When the surplus generated is held as cash in the normal course of business cycle or accumulated and held temporarily as cash to meet a large defined investment within a short period of time (say maximum of two or three years) then such cash fall within the definition of normal cash surplus to be valued at face value.
In the case of Cairn, cash is about one third of book value, which doesn’t come under the definition of cash surplus in the normal course of operation. Hence in this case cash can he valued a face value only if it is held for a specific identified investment to be made within a few years and the business valuation factors the financial benefit flowing from such identified investment.
There is also a possible exception to this rule of valuation, i.e. valuing large cash surplus at face value without a specific investment plan.
This exception applies when the price consideration of the company or share with large cash surplus is paid to the current owner in cash. In this case the seller sells cash for cash and hence it is fair to value cash at face value irrespective of the size of cash surplus and there is no need for investment plan for large surplus cash
In case of valuation for mergers, the above exemption can’t apply as the shareholders of the merging company generally get shares, and not cash.
Maybe in recognition of this principle, the merger scheme of Cairn with Vedanta provides for some cash (in the form of short-term security) component in the swap ratio offered to Cairn shareholders. Despite this, some minority shareholders of Cairn object to the valuation, possibly because this portion of compensation is less than 20 per cent of cash surplus of Cairn.
Then comes the complex question of how to value cash, which is larger than cash surplus in the normal course of business, nor held for a specific investment and the consideration for transfer of cash is not paid in cash.
The cash in this case is to be valued based on opportunistic value for the seller and the alternative cost of raising such cash for the buyer.
Both these values are extremely subjective and vaguer than well-defined methods of valuations such as DCF, profit multiple or replacement value. Hence, they will always be subject to controversies.

Choose the word/group of words which isMOST SIMILAR in meaning to the word/ group of words printed in bold as used in the passage.

Extremely

Read the passage carefully and answer the questions given below it. Certain words/ phrases are given in bold to help you locate them while answering some of the questions.

Though cash is king in business, it is the simplest item to value under any method of valuation. To value cash there is no need to use complex methodologies such as discounted cash flow (DCF) or to make complex assumptions such as growth rate or discount rate. Nor do you need expert valuers (like you need for valuation of fixed assets like land and buildings). The general assumption is cash is always valued at face value.
The current controversy on valuation in the proposed merger of Cairn India with Vedanta Resources centres on valuation of cash and raises a doubt about the above principle of valuation of cash.
Valuing cash at face value may not be valid in some exceptional circumstances. While valuing the company or shares, if the company has cash surplus of a normal magnitude the recommended method is to value the business and add the; cash surplus at face value to arrive at the total value of the company.
Then the question arises what is to be done in case the cash surplus is large. Before answering this we need clarity on what the definition of large cash surplus is.
When the surplus generated is held as cash in the normal course of business cycle or accumulated and held temporarily as cash to meet a large defined investment within a short period of time (say maximum of two or three years) then such cash fall within the definition of normal cash surplus to be valued at face value.
In the case of Cairn, cash is about one third of book value, which doesn’t come under the definition of cash surplus in the normal course of operation. Hence in this case cash can he valued a face value only if it is held for a specific identified investment to be made within a few years and the business valuation factors the financial benefit flowing from such identified investment.
There is also a possible exception to this rule of valuation, i.e. valuing large cash surplus at face value without a specific investment plan.
This exception applies when the price consideration of the company or share with large cash surplus is paid to the current owner in cash. In this case the seller sells cash for cash and hence it is fair to value cash at face value irrespective of the size of cash surplus and there is no need for investment plan for large surplus cash
In case of valuation for mergers, the above exemption can’t apply as the shareholders of the merging company generally get shares, and not cash.
Maybe in recognition of this principle, the merger scheme of Cairn with Vedanta provides for some cash (in the form of short-term security) component in the swap ratio offered to Cairn shareholders. Despite this, some minority shareholders of Cairn object to the valuation, possibly because this portion of compensation is less than 20 per cent of cash surplus of Cairn.
Then comes the complex question of how to value cash, which is larger than cash surplus in the normal course of business, nor held for a specific investment and the consideration for transfer of cash is not paid in cash.
The cash in this case is to be valued based on opportunistic value for the seller and the alternative cost of raising such cash for the buyer.
Both these values are extremely subjective and vaguer than well-defined methods of valuations such as DCF, profit multiple or replacement value. Hence, they will always be subject to controversies.

Choose the word/group of words which isMOST SIMILAR in meaning to the word/ group of words printed in bold as used in the passage.

Vaguer

Read the passage carefully and answer the questions given below it. Certain words/ phrases are given in bold to help you locate them while answering some of the questions.

Though cash is king in business, it is the simplest item to value under any method of valuation. To value cash there is no need to use complex methodologies such as discounted cash flow (DCF) or to make complex assumptions such as growth rate or discount rate. Nor do you need expert valuers (like you need for valuation of fixed assets like land and buildings). The general assumption is cash is always valued at face value.
The current controversy on valuation in the proposed merger of Cairn India with Vedanta Resources centres on valuation of cash and raises a doubt about the above principle of valuation of cash.
Valuing cash at face value may not be valid in some exceptional circumstances. While valuing the company or shares, if the company has cash surplus of a normal magnitude the recommended method is to value the business and add the; cash surplus at face value to arrive at the total value of the company.
Then the question arises what is to be done in case the cash surplus is large. Before answering this we need clarity on what the definition of large cash surplus is.
When the surplus generated is held as cash in the normal course of business cycle or accumulated and held temporarily as cash to meet a large defined investment within a short period of time (say maximum of two or three years) then such cash fall within the definition of normal cash surplus to be valued at face value.
In the case of Cairn, cash is about one third of book value, which doesn’t come under the definition of cash surplus in the normal course of operation. Hence in this case cash can he valued a face value only if it is held for a specific identified investment to be made within a few years and the business valuation factors the financial benefit flowing from such identified investment.
There is also a possible exception to this rule of valuation, i.e. valuing large cash surplus at face value without a specific investment plan.
This exception applies when the price consideration of the company or share with large cash surplus is paid to the current owner in cash. In this case the seller sells cash for cash and hence it is fair to value cash at face value irrespective of the size of cash surplus and there is no need for investment plan for large surplus cash
In case of valuation for mergers, the above exemption can’t apply as the shareholders of the merging company generally get shares, and not cash.
Maybe in recognition of this principle, the merger scheme of Cairn with Vedanta provides for some cash (in the form of short-term security) component in the swap ratio offered to Cairn shareholders. Despite this, some minority shareholders of Cairn object to the valuation, possibly because this portion of compensation is less than 20 per cent of cash surplus of Cairn.
Then comes the complex question of how to value cash, which is larger than cash surplus in the normal course of business, nor held for a specific investment and the consideration for transfer of cash is not paid in cash.
The cash in this case is to be valued based on opportunistic value for the seller and the alternative cost of raising such cash for the buyer.
Both these values are extremely subjective and vaguer than well-defined methods of valuations such as DCF, profit multiple or replacement value. Hence, they will always be subject to controversies.

Choose the word/group of words which isMOST SIMILAR in meaning to the word/ group of words printed in bold as used in the passage.

Magnitude

Read the passage carefully and answer the questions given below it. Certain words/ phrases are given in bold to help you locate them while answering some of the questions.

Though cash is king in business, it is the simplest item to value under any method of valuation. To value cash there is no need to use complex methodologies such as discounted cash flow (DCF) or to make complex assumptions such as growth rate or discount rate. Nor do you need expert valuers (like you need for valuation of fixed assets like land and buildings). The general assumption is cash is always valued at face value.
The current controversy on valuation in the proposed merger of Cairn India with Vedanta Resources centres on valuation of cash and raises a doubt about the above principle of valuation of cash.
Valuing cash at face value may not be valid in some exceptional circumstances. While valuing the company or shares, if the company has cash surplus of a normal magnitude the recommended method is to value the business and add the; cash surplus at face value to arrive at the total value of the company.
Then the question arises what is to be done in case the cash surplus is large. Before answering this we need clarity on what the definition of large cash surplus is.
When the surplus generated is held as cash in the normal course of business cycle or accumulated and held temporarily as cash to meet a large defined investment within a short period of time (say maximum of two or three years) then such cash fall within the definition of normal cash surplus to be valued at face value.
In the case of Cairn, cash is about one third of book value, which doesn’t come under the definition of cash surplus in the normal course of operation. Hence in this case cash can he valued a face value only if it is held for a specific identified investment to be made within a few years and the business valuation factors the financial benefit flowing from such identified investment.
There is also a possible exception to this rule of valuation, i.e. valuing large cash surplus at face value without a specific investment plan.
This exception applies when the price consideration of the company or share with large cash surplus is paid to the current owner in cash. In this case the seller sells cash for cash and hence it is fair to value cash at face value irrespective of the size of cash surplus and there is no need for investment plan for large surplus cash
In case of valuation for mergers, the above exemption can’t apply as the shareholders of the merging company generally get shares, and not cash.
Maybe in recognition of this principle, the merger scheme of Cairn with Vedanta provides for some cash (in the form of short-term security) component in the swap ratio offered to Cairn shareholders. Despite this, some minority shareholders of Cairn object to the valuation, possibly because this portion of compensation is less than 20 per cent of cash surplus of Cairn.
Then comes the complex question of how to value cash, which is larger than cash surplus in the normal course of business, nor held for a specific investment and the consideration for transfer of cash is not paid in cash.
The cash in this case is to be valued based on opportunistic value for the seller and the alternative cost of raising such cash for the buyer.
Both these values are extremely subjective and vaguer than well-defined methods of valuations such as DCF, profit multiple or replacement value. Hence, they will always be subject to controversies.

Choose the word/group of words which isMOST OPPOSITE in meaning of the word/group of words printed in bold as used in the passage.

Assumption