Reasoning Quiz

Directions (1-5): Below is given a passage followed by several possible inferences which can be drawn from the facts stated in the passage. You have to examine each inference separately in the context of the passage and decide upon its degree of truth or falsity. Mark answer

(1) if the inference is “definitely true”, ie it properly follows from the statement of facts given.
(2) if the inference is “probably true” though not “definitely true” in the light of the facts given.
(3) if the “data are inadequate”, ie from the facts given you cannot say whether the inference is likely to be true or false.
(4) if the inference is “probably false” though not “definitely false” in the light of the facts given.
(5) if the inference is “definitely false”, ie it cannot possibly be drawn from the facts given for it contradicts the given facts.

A study conducted by a committee, titled “World Class in India”, found the Indian bicycle industry to be globally competitive. It projected the demand to grow from 117.2 lakh units in 2009-10 to 129.5 lakh units in 2010-11. However, all this has changed drastically post-imposition of excise duty. According to All India Cycle Manufacturers’ Association (A1CMA). the production figure would be in the vicinity of 100 lakh units. It says that against the net gain of excise duty of Rs 50 crore. the Government has lost 29 lakh bicycles. Even if one assumes that the production is less by 29 lakh units, the Government will lose Rs 122 per bicycle, which is the excise duty paid actually on inputs by manufacturers. Thus the Government has lost Rs 35 crore. Not to forget the losses in terms of 2 per cent central sales tax (CST) and the state taxes which vary from 4-8 per cent. Assuming an average of 6 per cent states tax and 2 per cent CST, the Government has lost another Rs 25 crore.

1. In the total bargain it seems that there will be a net loss of Rs 10 crore to the government.

2. There will be no decline in domestic demand of bicycle in 2010-11.

3. AICMA acts as a liaisoning body with the government to highlight the industry’s problem.

4. The reason for India’s export success in the past is the large home base ofthe bicycle.

5. Imposition of excise duty has unnerved the Indian bicycle industry.

1. 2
2. 4
3. 4
4. 1
5. 3



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