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CUET Business Studies 2025 PYQs3 June Shift 1. Free, no login required.

Business Studies

past year questions, CUET Business Studies 2025 3 June Shift 1

Business Finance

past year questions, Business Studies, CUET Business Studies 2025 3 June Shift 1

Easy

Green Innovations Ltd. is an emerging company specializing in renewable energy solutions, such as solar panels and wind turbines. The company has seen steady growth in its first few years, and management is now focusing on long-term financial strategies to fuel further expansion.

Green Innovations plans to invest $15 million in new manufacturing facilities and R&D for product innovation in the upcoming fiscal year. The company's CFO is working on a financial plan to ensure the funds are allocated efficiently while maintaining a healthy cash flow. The company has also forecasted a 20% increase in sales due to growing demand for sustainable energy solutions.

Currently, Green Innovations is reinvesting its profits into growth and diversification projects. It is allocating firm's capital to different projects with long term implications for the business.

The company's current composition of capital consists of 60% equity and 40% debt. The management is considering adjusting the mix to increase debt in order to take advantage of low-interest rates.

Green Innovations is focused on minimizing its cost of capital to ensure that future investments yield strong returns while keeping debt levels manageable.

"Green Innovations plans to invest $15 million in new manufacturing facilities and R&D for product innovation in the upcoming fiscal year. The company's CFO is working on a financial plan to ensure the funds are allocated efficiently while maintaining a healthy cash flow". Identify the concept of financial management which is being discussed in the aforesaid statement.

Solution

✅ Correct Option: 2,3

Option 1: Working Capital decision -> Focuses on managing short-term assets and liabilities to maintain day-to-day operational liquidity and cash flow.

Option 4: Financial Leverage -> Refers to the use of borrowed funds (debt) to finance investments and operations.

The above two options can be eliminated.

Both Financial Planning (Option 2) and Capital Budgeting decision (Option 3) apply (and were awarded marks).

(1) “invest $15 million in new manufacturing facilities and R&D” → that is a Capital Budgeting decision (long-term investment in fixed assets/R&D).

(2) “CFO is working on a financial plan to allocate funds efficiently while maintaining healthy cash flow” → that is Financial Planning (planning/scheduling funds, allocation, and cash-flow sustainability).

So, Option 3 captures the investment decision, and Option 2 captures the planning/financing-and-allocation framework around it.

More from this set:

Question 46

The management is considering adjusting the mix to increase debt in order to take advantage of low-interest rates, but this will increase the ______ risk for the company.

Question 47

What financial metric will Green Innovations focus on to assess investment opportunities?

Question 48

"The company's current composition of capital consists of 60% equity and 40% debt". Identify the concept that is being highlighted in the aforesaid statement.

Question 49

"Currently, Green Innovations is reinvesting its profits into growth and diversification projects. It is allocating firm's capital to different projects with long term implications for the business.". Identify the concept of financial management discussed in the aforesaid statement.

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CUET Business Studies Past Year Questions (Topic-Wise)