Direction (Q. 1 - 5) : Read the following passage very carefully and answer the questions given below.
The concept of profit as a factor of payment is elusive. The practical identification of profit receipts is extremely difficult because the term is commonly used in many different and arbitrary ways. The layman understands profit in the framework established by his accountant; but an accountant uses the word in three distinct ways. Gross profit is the difference net between the sales and the cost of manufacturing the goods sold; net operating profit is the gross profit less selling and general expenses; and net profit is what remains after corporate income taxes and nonoperating expenses are deducted from the net operating profit. Thus, in the case of a corooration, net profit includes dividends paid to stockholders (both common and preferred) and retained earnings, and the net profit of a sole proprietorship includes implicit compensation for the labour of the owner. These definitions of net profit involve payments to more than one factor of production and are not very useful to the economist. Similarly, the meaning of profit for tax purposes is based upon the definition set up by the government. Furthermore, the profit position of a firm can be modified by altering the accounting procedures or changing the method by which depreciation is calculated.
Profit is the only return to a factor of production that may be negative. It is ordinarily considered to be the residual sum after all costs, including payments to other factors, have been paid out of revenues. Whenever costs exceed revenues, negative profit to the entrepreneur results.
The rate of profit may be expressed in a number of ways. It is ordinarily most meaningful to present profit as a fraction of equity of the firm. It is sometimes given as percentage of capital (which includes the funds borrowed by the business) or as a fraction of sales. In the latter two cases, the profit rate is ordinarily much smaller. For the economy as a whole, profit may be expressed as a proportion of national income.
Direction (Q. 6 - 10) : Rearrange the following five sentences (A), (B), (C), (D) and (E) in the proper sequence to form a meaningful paragraph; then answer the questions given below them.
A. Even more interesting than the match was the commentary.
B. It was a show of great skill.
C I was watching the cricket match last night.
D. With 18 runs needed off two overs and two wickets in hand, it was touch and go whether India would win.
E The commentator subtly criticised the selectors.
Which of the following sentences would be the FIRST after rearrangement ?