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CUET Business Studies 2025 PYQs31 May Shift 1. Free, no login required.

Business Studies

past year questions, CUET Business Studies 2025 31 May Shift 1

Business Finance

past year questions, Business Studies, CUET Business Studies 2025 31 May Shift 1

Easy

'Laxmi Enterprise' is a textile manufacturing firm. It has been consistently earning good profits for many years. This year, too, it has been able to generate enough profits. There is availability of enough cash in the company and good prospects for growth in the future. Now they wished to diversify their business. The CEO of Laxmi Enterprise is considering two options, either to diversify into manufacturing cosmetics or switches. So they wanted to purchase land, to set up a manufacturing unit in the backward area of Assam, which would lead to the generation of employment opportunities in the area, but only after fulfilling all legal requirements and taking appropriate steps to ensure that the environment was not polluted. The finance manager of the company, Mr. Vikrant was asked by the management to prepare a report on the factors that should be considered while making their decisions.

Which of the following is not affected by the decision being considered by the management?

Solution

✅ Correct Option: 4

Option 1 -> Management decisions regarding investments, expansions, or divestments directly impact the size of assets held by the company.

Option 2 -> Strategic and operational decisions made by management significantly influence the company's profitability through revenue generation and cost management.

Option 3 -> Management decisions affect cash inflows and outflows, thereby impacting the overall cash flow position of the organization.

Option 4 -> Interest payments on old debts are committed obligations based on past financing decisions and remain unchanged regardless of current management decisions.

Hence, Option 4: Interest payment on old debts -> These are sunk costs or committed costs arising from past decisions. Current management decisions cannot alter existing debt obligations or their interest payments, making them irrelevant for present decision-making analysis -> correct

More from this set:

Question 46

Identify the incorrect statement related to the decision of investing in a land by the company, from the options given below:

Question 47

The decision considered by the management in the above case is related to:

Question 48

Which of the following decision is being considered by the management in the above case?

Question 50

Which of the following is not a factor affecting the important decision being discussed in the passage above?

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CUET Business Studies Past Year Questions (Topic-Wise)