Question:hard
Shyam is running a start-up. His initial investments are high and he is trying hard to manage and increase his cash flow. The sundry expenses that his firm incurs is negligible. He found from his accountant that the amount of pre-paid expenses in the balance sheet, which were booked from the previous year to the current year was increased. Shyam also ensured that his cash funded by the venture capitalists did not reduce when compared to the previous year. The interest that he gets from his fixed deposits increases, which is in tune with his sundry expenses. The final effect on cash for this year would be ____________.
Shyam is running a start-up. His initial investments are high and he is trying hard to manage and increase his cash flow. The sundry expenses that his firm incurs is negligible. He found from his accountant that the amount of pre-paid expenses in the balance sheet, which were booked from the previous year to the current year was increased. Shyam also ensured that his cash funded by the venture capitalists did not reduce when compared to the previous year. The interest that he gets from his fixed deposits increases, which is in tune with his sundry expenses. The final effect on cash for this year would be ____________.
Show Hint
List which clues push cash in and which push cash out, then check whether the question gives enough numbers to compare the size of those pushes.
Updated On: Aug 18, 2026
- Cash flow marginally increases
- Cash flow exponentially increases
- Cash flow remains the same
- None of the above
Show Solution
The Correct Option is D
Solution and Explanation
Step 1: Sort each clue as a source of cash or a use of cash.
Higher prepaid expense is a use, cash goes out now for a benefit that comes later.
Step 2: Check the two remaining clues the same way.
VC funding staying level is neither a source nor a use, it is simply unchanged, so it adds nothing to the comparison. Higher fixed deposit interest is a genuine source, cash actually comes in.
Step 3: Try to compare the one use against the one source.
We have a use going up (prepaid expense) and a source going up (interest), but the question gives no rupee values for either, and only says the interest rise is in tune with sundry expenses, which are called negligible in size. Without numbers, in tune with tells us nothing about which movement wins.
Step 4: Remember what is missing from the picture.
A company's cash for the year also moves with sales, day to day spending and other flows that are never mentioned here, so no fixed answer like a small rise or a huge rise can be defended from this data alone.
Final Answer:
Because the net change cannot be worked out from the facts given, the correct choice is none of the listed outcomes. \[ \boxed{\text{None of the above}} \]
Higher prepaid expense is a use, cash goes out now for a benefit that comes later.
Step 2: Check the two remaining clues the same way.
VC funding staying level is neither a source nor a use, it is simply unchanged, so it adds nothing to the comparison. Higher fixed deposit interest is a genuine source, cash actually comes in.
Step 3: Try to compare the one use against the one source.
We have a use going up (prepaid expense) and a source going up (interest), but the question gives no rupee values for either, and only says the interest rise is in tune with sundry expenses, which are called negligible in size. Without numbers, in tune with tells us nothing about which movement wins.
Step 4: Remember what is missing from the picture.
A company's cash for the year also moves with sales, day to day spending and other flows that are never mentioned here, so no fixed answer like a small rise or a huge rise can be defended from this data alone.
Final Answer:
Because the net change cannot be worked out from the facts given, the correct choice is none of the listed outcomes. \[ \boxed{\text{None of the above}} \]
Was this answer helpful?
0
Top Questions on Critical Reasoning
- Read the following statements and answer the question that follows.
A. Back then, they were owned by companies and installed on their premises.
B. Rooms and servers began to replace computer mainframes in the 1990’s.
C. These were supplemented by processors from Intel, which by the mid-2000s translated its dominance of PC semiconductors into a near monopoly of the server market.
D. They mostly ran on chips made by IBM and HP, the big tech of the day.
E. Things started to change once again around a decade ago, when Amazon began selling some of its spare server capacity.
Which of the following combinations is the MOST logically ordered?- XAT - 2024
- Verbal and Logical Ability
- Critical Reasoning
- Go through the statements below and answer the question that follows.
A. Maybe you have survived major trauma and have a hard time feeling safe.
B. You’ll probably discover that your fear and struggles make sense on account of what you’ve lived through.
C. Instead of beating yourself up for reacting in ways you don’t understand, you can develop compassion for yourself and what you’ve been through.
D. Perhaps you have experienced a sudden death, and you are often anxious about the health of your loved ones.
E. You may also find out that you have more strength than you knew, the same strength that has sustained you this far….
Which of the following combinations is the MOST logically ordered?- XAT - 2024
- Verbal and Logical Ability
- Critical Reasoning
- Read the following paragraph and answer the question that follows.
Fear is the greatest motivator of all time. Conflict born of fear is behind our every action, driving us forward like the cogs of a clock. Fear is desire’s dark dress, its doppelgänger. “Love and dread are brothers,” says Julian of Norwich. As desire is wanting and fear is not-wanting, they become inexorably linked; just as desire can be destructive (the desire for power), fear can be constructive (fear of hurting another); fear of poverty becomes desire for wealth.
Which of the following statements can be BEST concluded from the paragraph?- XAT - 2024
- Verbal and Logical Ability
- Critical Reasoning
- Read the following paragraphs and answer the question that follows.
Paragraph 1: Here are some handy rules of thumb. Anyone who calls themselves a thought leader is to be avoided. A man who does not wear socks cannot be trusted. And a company that holds an employee-appreciation day does not appreciate its employees.
Paragraph 2: It is not just that the message sent by acknowledging staff for one out of 260-odd working days is a bit of a giveaway (there isn’t a love-your-spouse day ... for the same reason). It is also that the ideas are usually so tragically unappreciative. You have worked hard all year so you get a slice of cold pizza or a rock stamped with the words “You rock”?
Which of the following BEST describes the relationship of the first paragraph with the second paragraph?- XAT - 2024
- Verbal and Logical Ability
- Critical Reasoning
- Want to practice more? Try solving extra ecology questions todayView All Questions
Questions Asked in SNAP exam
In the following figure, the smaller triangle represents teachers; the big triangle represents politicians; circle represents graduates and rectangle represents members of Parliament. Different regions are being represented by letters of English alphabet. On the basis of the above diagram, answer the following questions: 
- SNAP - 2024
- Venn Diagrams