Business Studies

Business Finance

Easy

Read the passage carefully and answer the question.

Mr. Rajesh Gulati is the Finance Manager of 'Health and Life Ltd.' a company dealing with health and organic food items. The company sells its products in smaller quantities in attractive containers. Moreover they have also decided to provide an additional layer of packaging for their products for the purpose of protections along with necessary storage, identification and even convenient transportation.

Keeping up with the latest packaging technology the company decided to upgrade its machinery. This, however, involved a major decision making as to how funds should be invested, so what the company is able to earn highest possible return.

Mr. Gulati estimated the amount of funds required for this purpose. He began with the preparation of sales forecast for the next four years.

He also collected the relevant data about the profit estimates in the coming years. By doing this he wanted to be sure about the availability of funds from internal sources. For the remaining funds he is trying to find out alternative sources.

Identify the financial decision taken by 'Health and Life Ltd.' that involves allocation of funds.

Investment decision

Dividend decision

Financing decision

Management decision

✅ Correct Option: 1

The investment decision relates to how funds are allocated among various assets to earn the highest possible return. Upgrading machinery by deciding how funds should be invested to maximise returns is an investment or capital budgeting decision.

Question 46

Identify the concept of Financial Management being mentioned in the above case.

Question 47

The various objectives of financial planning concept identified in the case study are :

(a) To see for stock market reactions

(b) To ensure availability of funds whenever required

(d) To take care of purchasing raw material

(e) To see that the firm does not raise resources unnecessarily

Choose the most appropriate answer from the options given below :

Question 49

Identify the financial decision of Mr. Gulati about the requirement of finance to be raised for the company from various sources.

Question 50

Name the various levels of packaging used by 'Health and Life Ltd.' as mentioned in the case study.

(a) Primary Package

(b) Secondary Package

(d) Transportation Package

(e) Fancy Package

Choose the most appropriate answer from the options given below :

Identify the financial decision taken by 'Health and Life Ltd.' that involves allocation of funds.

Solution

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CUET Business Studies Past Year Questions (Topic-Wise)