Q1:
11th May Shift 1
Business Studies > Business Finance
Easy
What is the purpose of planning a cash budget?
Correct Answer
Option 1
Correct Answer
CUET Business Studies Business Studies > Business Finance PYQs
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Q2:
11th May Shift 1
Business Studies > Business Finance
Easy
Which among the following are considered for calculating working capital out of below mentioned balance sheet items? A. Stock B. Marketable Securities C. Prepaid Expenses D. Debentures Choose the correct answer from the options given below:
Correct Answer
Option 3
Correct Answer
Q3:
11th May Shift 1
Business Studies > Business Finance
Medium
Which among the following is a factor affecting Capital Budgeting Decision?
Correct Answer
Option 4
Correct Answer
Q4:
11th May Shift 1
Business Studies > Business Finance
Easy
Which among the following is an objective of financial planning?
Correct Answer
Option 2
Correct Answer
Q5:
11th May Shift 1
Business Studies > Business Finance
Medium
Which among the following is not a factor affecting the choice of capital structure?
Correct Answer
Option 1
Correct Answer
Q6:
11th May Shift 1
Business Studies > Business Finance
Medium
Match the LIST-I with LIST-II | LIST-I (Type of Decision or Requirement) | LIST-II (Factors affecting) | |---|---| | A. Dividend Decision | I. Fixed operating costs | | B. Financing Decision | II. The investment criteria involved | | C. Capital Budgeting Decision | III. Business Cycle | | D. Working Capital requirement | IV. Shareholder's preference | Choose the correct answer from the options given below:
Correct Answer
Option 4
Correct Answer
Q7:
11th May Shift 1
Business Studies > Business Finance
Easy
The Interest Coverage Ratio (ICR) can be calculated as?
Correct Answer
Option 3
Correct Answer
Q8:
3 June Shift 2
Business Studies > Business Finance
Easy
Identify the correct sequence of the process of financial planning from the options given below: (A) The preparation of a sales forecast. (B) Estimates showing expected profits are made to know how much fund requirements can be met internally. (C) The preparation of financial statements. (D) Estimation of the requirement for external funds. Choose the correct answer from the options given below:
Correct Answer
Option 2
Correct Answer
Q9:
3 June Shift 2
Business Studies > Business Finance
Medium
Which of the following is not a factor affecting the working capital requirements of a business firm?
Correct Answer
Option 4
Correct Answer
Q10:
3 June Shift 2
Business Studies > Business Finance
Easy
Aval Ltd. is engaged in the business of the export of canvas goods and bags. In the past, the performance of the company was above expectations. In line with the latest demand in the market, the company decided to venture into leather goods for which it required specialized machinery. For this, the Finance Manager Prabhu prepared a financial blueprint for the organization's future operations to estimate the amount of funds required and the timings with the objective to ensure that enough funds are available at the right time. He also collected the relevant data about the profit estimates for the coming years. By doing this, he wanted to be sure about the availability of funds from the internal sources of the business. For the remaining funds, he is trying to find alternative sources from outside. The company is willing to go for a public issue of shares and debentures to be made under SEBI guidelines. Public issue of shares and debentures requires considerable outlay of funds too. Due to extensive operations, the manager is of the viewpoint that a company may have to ensure that earnings before interest and taxes of a company should cover the interest obligation. The manager also felt that the cash profits generated by the operations need to be compared with the total cash required for the service of the debentures and the preference share capital.
"The company is willing to go for a public issue of shares and debentures to be made under SEBI guidelines". Identify the factor affecting capital structure highlighted in the aforesaid statement.
Correct Answer
Option 2
Correct Answer
Q11:
3 June Shift 2
Business Studies > Business Finance
Easy
Aval Ltd. is engaged in the business of the export of canvas goods and bags. In the past, the performance of the company was above expectations. In line with the latest demand in the market, the company decided to venture into leather goods for which it required specialized machinery. For this, the Finance Manager Prabhu prepared a financial blueprint for the organization's future operations to estimate the amount of funds required and the timings with the objective to ensure that enough funds are available at the right time. He also collected the relevant data about the profit estimates for the coming years. By doing this, he wanted to be sure about the availability of funds from the internal sources of the business. For the remaining funds, he is trying to find alternative sources from outside. The company is willing to go for a public issue of shares and debentures to be made under SEBI guidelines. Public issue of shares and debentures requires considerable outlay of funds too. Due to extensive operations, the manager is of the viewpoint that a company may have to ensure that earnings before interest and taxes of a company should cover the interest obligation. The manager also felt that the cash profits generated by the operations need to be compared with the total cash required for the service of the debentures and the preference share capital.
"Finance Manager Prabhu prepared a financial blueprint for the organization's future operations to estimate the amount of funds required and the timings with the objective to ensure that enough funds are available at the right time". Identify the concept of financial management highlighted in the aforesaid statement.
Correct Answer
Option 1
Correct Answer
Q12:
3 June Shift 2
Business Studies > Business Finance
Easy
Aval Ltd. is engaged in the business of the export of canvas goods and bags. In the past, the performance of the company was above expectations. In line with the latest demand in the market, the company decided to venture into leather goods for which it required specialized machinery. For this, the Finance Manager Prabhu prepared a financial blueprint for the organization's future operations to estimate the amount of funds required and the timings with the objective to ensure that enough funds are available at the right time. He also collected the relevant data about the profit estimates for the coming years. By doing this, he wanted to be sure about the availability of funds from the internal sources of the business. For the remaining funds, he is trying to find alternative sources from outside. The company is willing to go for a public issue of shares and debentures to be made under SEBI guidelines. Public issue of shares and debentures requires considerable outlay of funds too. Due to extensive operations, the manager is of the viewpoint that a company may have to ensure that earnings before interest and taxes of a company should cover the interest obligation. The manager also felt that the cash profits generated by the operations need to be compared with the total cash required for the service of the debentures and the preference share capital.
"Public issue of shares and debentures requires considerable outlay of funds at the time of issue too". Identify the factor affecting capital structure highlighted in the aforesaid statement.
Correct Answer
Option 3
Correct Answer
Q13:
3 June Shift 2
Business Studies > Business Finance
Easy
Aval Ltd. is engaged in the business of the export of canvas goods and bags. In the past, the performance of the company was above expectations. In line with the latest demand in the market, the company decided to venture into leather goods for which it required specialized machinery. For this, the Finance Manager Prabhu prepared a financial blueprint for the organization's future operations to estimate the amount of funds required and the timings with the objective to ensure that enough funds are available at the right time. He also collected the relevant data about the profit estimates for the coming years. By doing this, he wanted to be sure about the availability of funds from the internal sources of the business. For the remaining funds, he is trying to find alternative sources from outside. The company is willing to go for a public issue of shares and debentures to be made under SEBI guidelines. Public issue of shares and debentures requires considerable outlay of funds too. Due to extensive operations, the manager is of the viewpoint that a company may have to ensure that earnings before interest and taxes of a company should cover the interest obligation. The manager also felt that the cash profits generated by the operations need to be compared with the total cash required for the service of the debentures and the preference share capital.
"Due to extensive operations, the manager is of the viewpoint that a company may have to ensure that earnings before interest and taxes of a company should cover the interest obligation". Identify the factor affecting capital structure highlighted in the aforesaid statement.
Correct Answer
Option 2
Correct Answer
Q14:
3 June Shift 2
Business Studies > Business Finance
Easy
Aval Ltd. is engaged in the business of the export of canvas goods and bags. In the past, the performance of the company was above expectations. In line with the latest demand in the market, the company decided to venture into leather goods for which it required specialized machinery. For this, the Finance Manager Prabhu prepared a financial blueprint for the organization's future operations to estimate the amount of funds required and the timings with the objective to ensure that enough funds are available at the right time. He also collected the relevant data about the profit estimates for the coming years. By doing this, he wanted to be sure about the availability of funds from the internal sources of the business. For the remaining funds, he is trying to find alternative sources from outside. The company is willing to go for a public issue of shares and debentures to be made under SEBI guidelines. Public issue of shares and debentures requires considerable outlay of funds too. Due to extensive operations, the manager is of the viewpoint that a company may have to ensure that earnings before interest and taxes of a company should cover the interest obligation. The manager also felt that the cash profits generated by the operations need to be compared with the total cash required for the service of the debentures and the preference share capital.
Which financial ratio will establish the relation between the cash profits generated by the operations and the total cash required for the service of the debentures and the preference share capital?
Correct Answer
Option 2
Correct Answer
Q15:
3 June Shift 1
Business Studies > Business Finance
Medium
Match List-I with List-II | List-I | List-II | | --- | --- | | Concept | Equation | | (A) Financial Leverage | (I) (Profit after tax+depreciation+interest+non cash expenses)/<br>(pref dividend+interest+repayment obligation) | | (B) Net Working Capital | (II) Debt/Equity | | (C) Interest Coverage Ratio | (III) Current Assets - Current Liabilities | | (D) Debt service coverage ratio | (IV) EBIT/Interest | Choose the correct answer from the options given below:
Correct Answer
Option 4
Correct Answer
Q16:
3 June Shift 1
Business Studies > Business Finance
Medium
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.
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.
Correct Answer
Option 2
Correct Answer
Q17:
3 June Shift 1
Business Studies > Business Finance
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.
What financial metric will Green Innovations focus on to assess investment opportunities?
Correct Answer
Option 2
Correct Answer
Q18:
3 June Shift 1
Business Studies > Business Finance
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.
"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.
Correct Answer
Option 4
Correct Answer
Q19:
3 June Shift 1
Business Studies > Business Finance
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.
"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.
Correct Answer
Option 3
Correct Answer
Q20:
3 June Shift 1
Business Studies > Business Finance
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.
Correct Answer
Option 2,3
Correct Answer
Q21:
2 June Shift 2
Business Studies > Business Finance
Medium
Arun wants to open a retail mart. He is thinking over the selection of the best financing alternative. He made an estimation that Rs. 40 lakhs, is an adequate amount of money to start the venture. He is planning to finance the business by investing Rs. 25 lakhs of his own money and the rest would be financed by debts. He is very careful about the future cash-flow in the business because the cost of raising funds from external sources is significant. He is working out to ensure that enough funds are available at the right time. If adequate funds are not available, the firm will not be able to honour its commitments and carry out its plans. On the other hand, if excess funds are available, it will unnecessarily add to the cost and may encourage wasteful expenditure. Since it will be a trading business, it needs lower investment in fixed assets. Since Arun is planning to initiate the business from a small level, the quantum of inventory and debtors required is generally low.
"Since it will be a trading business, it needs lower investment in fixed assets." Which factor is highlighted by the aforesaid statement?
Correct Answer
Option 2
Correct Answer
Q22:
2 June Shift 2
Business Studies > Business Finance
Medium
Arun wants to open a retail mart. He is thinking over the selection of the best financing alternative. He made an estimation that Rs. 40 lakhs, is an adequate amount of money to start the venture. He is planning to finance the business by investing Rs. 25 lakhs of his own money and the rest would be financed by debts. He is very careful about the future cash-flow in the business because the cost of raising funds from external sources is significant. He is working out to ensure that enough funds are available at the right time. If adequate funds are not available, the firm will not be able to honour its commitments and carry out its plans. On the other hand, if excess funds are available, it will unnecessarily add to the cost and may encourage wasteful expenditure. Since it will be a trading business, it needs lower investment in fixed assets. Since Arun is planning to initiate the business from a small level, the quantum of inventory and debtors required is generally low.
"Since Arun is planning to initiate the business from a small level, the quantum of inventory and debtors required is generally low." Which factor is highlighted by the aforesaid statement?
Correct Answer
Option 1
Correct Answer
Q23:
2 June Shift 2
Business Studies > Business Finance
Medium
Arun wants to open a retail mart. He is thinking over the selection of the best financing alternative. He made an estimation that Rs. 40 lakhs, is an adequate amount of money to start the venture. He is planning to finance the business by investing Rs. 25 lakhs of his own money and the rest would be financed by debts. He is very careful about the future cash-flow in the business because the cost of raising funds from external sources is significant. He is working out to ensure that enough funds are available at the right time. If adequate funds are not available, the firm will not be able to honour its commitments and carry out its plans. On the other hand, if excess funds are available, it will unnecessarily add to the cost and may encourage wasteful expenditure. Since it will be a trading business, it needs lower investment in fixed assets. Since Arun is planning to initiate the business from a small level, the quantum of inventory and debtors required is generally low.
What would be the total capital requirement of the business?
Correct Answer
Option 4
Correct Answer
Q24:
2 June Shift 2
Business Studies > Business Finance
Medium
Arun wants to open a retail mart. He is thinking over the selection of the best financing alternative. He made an estimation that Rs. 40 lakhs, is an adequate amount of money to start the venture. He is planning to finance the business by investing Rs. 25 lakhs of his own money and the rest would be financed by debts. He is very careful about the future cash-flow in the business because the cost of raising funds from external sources is significant. He is working out to ensure that enough funds are available at the right time. If adequate funds are not available, the firm will not be able to honour its commitments and carry out its plans. On the other hand, if excess funds are available, it will unnecessarily add to the cost and may encourage wasteful expenditure. Since it will be a trading business, it needs lower investment in fixed assets. Since Arun is planning to initiate the business from a small level, the quantum of inventory and debtors required is generally low.
"He is working out to ensure that enough funds are available at right time." The above statement indicates that Arun is involved in:
Correct Answer
Option 3
Correct Answer
Q25:
2 June Shift 2
Business Studies > Business Finance
Medium
Arun wants to open a retail mart. He is thinking over the selection of the best financing alternative. He made an estimation that Rs. 40 lakhs, is an adequate amount of money to start the venture. He is planning to finance the business by investing Rs. 25 lakhs of his own money and the rest would be financed by debts. He is very careful about the future cash-flow in the business because the cost of raising funds from external sources is significant. He is working out to ensure that enough funds are available at the right time. If adequate funds are not available, the firm will not be able to honour its commitments and carry out its plans. On the other hand, if excess funds are available, it will unnecessarily add to the cost and may encourage wasteful expenditure. Since it will be a trading business, it needs lower investment in fixed assets. Since Arun is planning to initiate the business from a small level, the quantum of inventory and debtors required is generally low.
What is the major issue in the case?
Correct Answer
Option 1
Correct Answer
Q26:
31 May Shift 1
Business Studies > Business Finance
Medium
'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.
Identify the incorrect statement related to the decision of investing in a land by the company, from the options given below:
Correct Answer
Option 3
Correct Answer
Q27:
31 May Shift 1
Business Studies > Business Finance
Medium
'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.
The decision considered by the management in the above case is related to:
Correct Answer
Option 1
Correct Answer
Q28:
31 May Shift 1
Business Studies > Business Finance
Easy
Read the following passage carefully and answer the questions given below
'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 decision is being considered by the management in the above case?
Correct Answer
Option 1
Correct Answer
Q29:
31 May Shift 1
Business Studies > Business Finance
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?
Correct Answer
Option 4
Correct Answer
Q30:
31 May Shift 1
Business Studies > Business Finance
Medium
'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 a factor affecting the important decision being discussed in the passage above?
Correct Answer
Option 4
Correct Answer
Q31:
30 May Shift 2
Business Studies > Business Finance
Easy
_________ is essentially the preparation of a financial blueprint of an organisation's future operations and it ensures that enough funds are available at right time.
Correct Answer
Option 3
Correct Answer
Q32:
30 May Shift 2
Business Studies > Business Finance
Easy
The cost of raising funds from the market is known as:
Correct Answer
Option 4
Correct Answer
Q33:
30 May Shift 2
Business Studies > Business Finance
Medium
Identify the correct statements in the context of financial planning. (A) The objective of financial planning is to ensure that enough funds are available at the right time. (B) Financial planning sees that firms do not raise funds unnecessarily from the market. (C) Proper matching of funds requirements and their availability is sought to be achieved by financial planning. (D) Financial planning includes both short-term and long-term planning. Choose the correct answer from the options given below:
Correct Answer
Option 3
Correct Answer
Q34:
30 May Shift 2
Business Studies > Business Finance
Easy
Which of the following factors affects capital budgeting decisions? (A) Cash flows of the project (B) The investment criteria involved (C) Stock market sentiments (D) Level of competition Choose the correct answer from the options given below:
Correct Answer
Option 2
Correct Answer
Q35:
30 May Shift 2
Business Studies > Business Finance
Easy
The decision about the investment in new machinery is called_______.
Correct Answer
Option 2
Correct Answer
Q36:
30 May Shift 1
Business Studies > Business Finance
Easy
Match List-I with List-II | List-I | List-II | | --- | --- | | Concept | Description | | (A) Capital Structure | (I) Long Term Investment. | | (B) Capital Budgeting | (II) Profit distributed to shareholders. | | (C) Working Capital | (III) Financing Mix of business. | | (D) Dividend | (IV) Money required for short-term needs. | Choose the correct answer from the options given below:
Correct Answer
Option 4
Correct Answer
Q37:
30 May Shift 1
Business Studies > Business Finance
Easy
Buying of new machinery is a decision relating to:
Correct Answer
Option 3
Correct Answer
Q38:
30 May Shift 1
Business Studies > Business Finance
Easy
Higher Debt-Equity Ratio results in ______
Correct Answer
Option 3
Correct Answer
Q39:
30 May Shift 1
Business Studies > Business Finance
Easy
The CFO of a company decides to maintain the capital structure as 1/2. The finance raised from owners and shareholders is Rs. 300 crore. How much debt financing does he need?
Correct Answer
Option 4
Correct Answer
Q40:
30 May Shift 1
Business Studies > Business Finance
Easy
The primary aim of financial management is:
Correct Answer
Option 4
Correct Answer
Q41:
29 May Shift 2
Business Studies > Business Finance
Medium
Identify the incorrect statement, from the options given below:
Correct Answer
Option 2
Correct Answer
Q42:
29 May Shift 2
Business Studies > Business Finance
Easy
The number of times earnings before interest and taxes of a company covers the interest obligation is indicated by which ratio?
Correct Answer
Option 2
Correct Answer
Q43:
29 May Shift 2
Business Studies > Business Finance
Easy
DSCR stands for:
Correct Answer
Option 2
Correct Answer
Q44:
29 May Shift 2
Business Studies > Business Finance
Easy
Identify the asset which can be easily converted into cash.
Correct Answer
Option 4
Correct Answer
Q45:
29 May Shift 2
Business Studies > Business Finance
Easy
Which among the following is NOT the current asset?
Correct Answer
Option 2
Correct Answer
Q46:
27 May Shift 2
Business Studies > Business Finance
Easy
Which among the following refers to the increase in profit earned by the equity shareholders due to the presence of fixed financial charges?
Correct Answer
Option 1
Correct Answer
Q47:
27 May Shift 2
Business Studies > Business Finance
Easy
Which among the following aims at smooth operations by focusing on fund requirements and their availability in the light of financial decisions?
Correct Answer
Option 1
Correct Answer
Q48:
27 May Shift 2
Business Studies > Business Finance
Easy
The formula to compute the Interest Coverage ratio is:
Correct Answer
Option 1
Correct Answer
Q49:
27 May Shift 2
Business Studies > Business Finance
Medium
Which concept of financial management affects both the profitability and the financial risk?
Correct Answer
Option 2
Correct Answer
Q50:
27 May Shift 2
Business Studies > Business Finance
Easy
Match List-I with List-II | List-I | List-II | | --- | --- | | Concept | Meaning | | (A) Working Capital | (I) It refers to the mix between owners and borrowed funds for the sources of business finance. | | (B) Financial Management | (II) It is essentially preparation of a financial blueprint for an organization's future operations. | | (C) Capital Structure | (III) This investment facilitates smooth day-to-day operations of the organization. | | (D) Financial Planning | (IV) It is concerned with optimal procurement as well as usage of finance. | Choose the correct answer from the options given below:
Correct Answer
Option 4
Correct Answer
Q51:
26 May Shift 2
Business Studies > Business Finance
Easy
What is the full form of EBIT?
Correct Answer
Option 2
Correct Answer
Q52:
26 May Shift 2
Business Studies > Business Finance
Easy
ABC Manufacturing Ltd., a mid-sized company, is planning to expand its operations by setting up a new production facility. The financial planning team estimates the project cost at $10 million. The company's finance manager must decide how to fund this project and evaluate its profitability.
The finance team forecasts future cash flows, determining that $6 million can be sourced internally through retained earnings. They prepare a financial budget aligning expected inflows and outflows with the company's goals.
The finance manager evaluates options for the remaining $4 million, including issuing equity or taking a bank loan. After analyzing interest rates and dilution of ownership, they decided to issue long-term debt at a 5% interest rate.
A detailed capital budgeting process is conducted. Using Net Present Value (NPV) and Internal Rate of Return (IRR), the project shows an NPV of $2 million and an IRR of 18%, higher than the company's hurdle rate of 12%. The investment is approved.
Post-debt issuance, the company's capital structure becomes 60% equity and 40% debt, maintaining an optimal balance to minimize the cost of capital.
The company plans to allocate funds for raw materials, labor, and inventory to ensure smooth operations. Efficient working capital management will reduce bottlenecks during the initial phases of production.
Which of the following ensures smooth operations in production?
Correct Answer
Option 2
Correct Answer
Q53:
26 May Shift 2
Business Studies > Business Finance
Hard
ABC Manufacturing Ltd., a mid-sized company, is planning to expand its operations by setting up a new production facility. The financial planning team estimates the project cost at $10 million. The company's finance manager must decide how to fund this project and evaluate its profitability.
The finance team forecasts future cash flows, determining that $6 million can be sourced internally through retained earnings. They prepare a financial budget aligning expected inflows and outflows with the company's goals.
The finance manager evaluates options for the remaining $4 million, including issuing equity or taking a bank loan. After analyzing interest rates and dilution of ownership, they decided to issue long-term debt at a 5% interest rate.
A detailed capital budgeting process is conducted. Using Net Present Value (NPV) and Internal Rate of Return (IRR), the project shows an NPV of $2 million and an IRR of 18%, higher than the company's hurdle rate of 12%. The investment is approved.
Post-debt issuance, the company's capital structure becomes 60% equity and 40% debt, maintaining an optimal balance to minimize the cost of capital.
The company plans to allocate funds for raw materials, labor, and inventory to ensure smooth operations. Efficient working capital management will reduce bottlenecks during the initial phases of production.
What is an optimal capital structure for ABC Ltd.?
Correct Answer
Option 3
Correct Answer
Q54:
26 May Shift 2
Business Studies > Business Finance
Easy
Read the following passage carefully and answer the given questions.
ABC Manufacturing Ltd., a mid-sized company, is planning to expand its operations by setting up a new production facility. The financial planning team estimates the project cost at $10 million. The company's finance manager must decide how to fund this project and evaluate its profitability.
The finance team forecasts future cash flows, determining that $6 million can be sourced internally through retained earnings. They prepare a financial budget aligning expected inflows and outflows with the company's goals.
The finance manager evaluates options for the remaining $4 million, including issuing equity or taking a bank loan. After analyzing interest rates and dilution of ownership, they decided to issue long-term debt at a 5% interest rate.
A detailed capital budgeting process is conducted. Using Net Present Value (NPV) and Internal Rate of Return (IRR), the project shows an NPV of $2 million and an IRR of 18%, higher than the company's hurdle rate of 12%. The investment is approved.
Post-debt issuance, the company's capital structure becomes 60% equity and 40% debt, maintaining an optimal balance to minimize the cost of capital.
The company plans to allocate funds for raw materials, labor, and inventory to ensure smooth operations. Efficient working capital management will reduce bottlenecks during the initial phases of production.
What was the source of internal funding for ABC Manufacturing Ltd.?
Correct Answer
Option 3
Correct Answer
Q55:
26 May Shift 2
Business Studies > Business Finance
Easy
ABC Manufacturing Ltd., a mid-sized company, is planning to expand its operations by setting up a new production facility. The financial planning team estimates the project cost at $10 million. The company's finance manager must decide how to fund this project and evaluate its profitability.
The finance team forecasts future cash flows, determining that $6 million can be sourced internally through retained earnings. They prepare a financial budget aligning expected inflows and outflows with the company's goals.
The finance manager evaluates options for the remaining $4 million, including issuing equity or taking a bank loan. After analyzing interest rates and dilution of ownership, they decided to issue long-term debt at a 5% interest rate.
A detailed capital budgeting process is conducted. Using Net Present Value (NPV) and Internal Rate of Return (IRR), the project shows an NPV of $2 million and an IRR of 18%, higher than the company's hurdle rate of 12%. The investment is approved.
Post-debt issuance, the company's capital structure becomes 60% equity and 40% debt, maintaining an optimal balance to minimize the cost of capital.
The company plans to allocate funds for raw materials, labor, and inventory to ensure smooth operations. Efficient working capital management will reduce bottlenecks during the initial phases of production.
In the context of ABC Manufacturing Ltd., the basic requirement of financial planning is to:
Correct Answer
Option 2
Correct Answer
Q56:
26 May Shift 2
Business Studies > Business Finance
Medium
ABC Manufacturing Ltd., a mid-sized company, is planning to expand its operations by setting up a new production facility. The financial planning team estimates the project cost at $10 million. The company's finance manager must decide how to fund this project and evaluate its profitability.
The finance team forecasts future cash flows, determining that $6 million can be sourced internally through retained earnings. They prepare a financial budget aligning expected inflows and outflows with the company's goals.
The finance manager evaluates options for the remaining $4 million, including issuing equity or taking a bank loan. After analyzing interest rates and dilution of ownership, they decided to issue long-term debt at a 5% interest rate.
A detailed capital budgeting process is conducted. Using Net Present Value (NPV) and Internal Rate of Return (IRR), the project shows an NPV of $2 million and an IRR of 18%, higher than the company's hurdle rate of 12%. The investment is approved.
Post-debt issuance, the company's capital structure becomes 60% equity and 40% debt, maintaining an optimal balance to minimize the cost of capital.
The company plans to allocate funds for raw materials, labor, and inventory to ensure smooth operations. Efficient working capital management will reduce bottlenecks during the initial phases of production.
Why is financial planning crucial for expansion?
Correct Answer
Option 1
Correct Answer
Q57:
24 May Shift 1
Business Studies > Business Finance
Medium
Arrange the following steps involved in the process of financial planning in logical sequence. (A) Sales forecast is made (B) Requirement of fixed capital and working capital is estimated (C) Expected profits are estimated (D) Sources of finance are identified Choose the correct answer from the options given below:
Correct Answer
Option 1
Correct Answer
Q58:
24 May Shift 1
Business Studies > Business Finance
Medium
Financial leverage is believed to be favorable if:<br><br>1. ROI is lower than cost of debt<br>2. ROI is higher than cost of debt<br>3. Debt is not easily available<br>4. If the interest rate is high
Correct Answer
Option 2
Correct Answer
Q59:
24 May Shift 1
Business Studies > Business Finance
Easy
Money required for carrying out business activity is called:
Correct Answer
Option 4
Correct Answer
Q60:
24 May Shift 1
Business Studies > Business Finance
Easy
Match List-I with List-II | List-I | List-II | | --- | --- | | (A) Net Working Capital | (I) Investments in long term assets. | | (B) Fixed capital decision | (II) Proportion of debt in the overall capital. | | (C) Financial Leverage | (III) Excess of current assets over current liabilities | | (D) Trading on equity | (IV) Increase in profit earned by the equity shareholders due to the presence of fixed financial charges. | Choose the correct answer from the options given below:
Correct Answer
Option 4
Correct Answer
Q61:
22 May Shift 2
Business Studies > Business Finance
Easy
Current assets are usually more liquid but contribute less to the profits than fixed assets. Examples of current assets are: (A) Cash in hand/Cash at the Bank (B) Marketable securities (C) Bills receivable (D) Finished goods inventory Choose the correct answer from the options given below:
Correct Answer
Option 3
Correct Answer
Q62:
22 May Shift 2
Business Studies > Business Finance
Easy
There are two projects, A and B (with the same risk involved), with a rate of return of 10 percent and X percent, respectively, if under normal circumstances, project B is selected. What could be the rate of return of Project B?
Correct Answer
Option 4
Correct Answer
Q63:
22 May Shift 2
Business Studies > Business Finance
Easy
Passage 1: Detrimental debt
On the basis of this passage, answer the questions from Q. No. 41 to Q. No. 45
Even successful businesses have debt, but how much is too much? Learning how to manage debt is what can put you ahead. Taking on the right amount of debt can mean the difference between a business struggling to survive and one that can respond nimbly to changing economic or market conditions. A number of circumstances may justify acquiring debt. As a general rule, borrowing makes the most sense when you need to bolster cash flow or finance growth or expansion. But while debt can provide the leverage you need to grow, too much debt can strangle your business. So the question is: How much debt is too much?
A business that doesn't grow dies. You've got to grow, but you've got to grow within the financial constraints of your business. What is the ideal capital structure a business needs in its industry to remain viable? The higher the volatility (in your industry), the less debt you should have. The smaller the volatility, the more debt you can afford. Consider the capital structure of a growing company, NextGen Ltd.
Total Funds used Rs. 30 Lakh
Interest rate is 10% p.a.
Tax rate 30%
EBIT Rs. 4 Lakh
Nextgen Ltd. has an option to raise different amounts of debt:
Situation I :No Debt
Situation II:Rs. 10 Lakh Debt
Situation III:Rs. 20 Lakh Debt
"Learning how to manage debt is what can put you ahead". Identify the concept highlighted in the aforesaid statement.
Correct Answer
Option 3
Correct Answer
Q64:
22 May Shift 2
Business Studies > Business Finance
Easy
Passage 1: Detrimental debt
On the basis of this passage, answer the questions from Q. No. 41 to Q. No. 45
Even successful businesses have debt, but how much is too much? Learning how to manage debt is what can put you ahead. Taking on the right amount of debt can mean the difference between a business struggling to survive and one that can respond nimbly to changing economic or market conditions. A number of circumstances may justify acquiring debt. As a general rule, borrowing makes the most sense when you need to bolster cash flow or finance growth or expansion. But while debt can provide the leverage you need to grow, too much debt can strangle your business. So the question is: How much debt is too much?
A business that doesn't grow dies. You've got to grow, but you've got to grow within the financial constraints of your business. What is the ideal capital structure a business needs in its industry to remain viable? The higher the volatility (in your industry), the less debt you should have. The smaller the volatility, the more debt you can afford. Consider the capital structure of a growing company, NextGen Ltd.
Total Funds used Rs. 30 Lakh
Interest rate is 10% p.a.
Tax rate 30%
EBIT Rs. 4 Lakh
Nextgen Ltd. has an option to raise different amounts of debt:
Situation I :No Debt
Situation II:Rs. 10 Lakh Debt
Situation III:Rs. 20 Lakh Debt
The EBT of NextGen Ltd with zero debt situation will be
Correct Answer
Option 1
Correct Answer
Q65:
22 May Shift 2
Business Studies > Business Finance
Easy
Passage 1: Detrimental debt
On the basis of this passage, answer the questions from Q. No. 41 to Q. No. 45
Even successful businesses have debt, but how much is too much? Learning how to manage debt is what can put you ahead. Taking on the right amount of debt can mean the difference between a business struggling to survive and one that can respond nimbly to changing economic or market conditions. A number of circumstances may justify acquiring debt. As a general rule, borrowing makes the most sense when you need to bolster cash flow or finance growth or expansion. But while debt can provide the leverage you need to grow, too much debt can strangle your business. So the question is: How much debt is too much?
A business that doesn't grow dies. You've got to grow, but you've got to grow within the financial constraints of your business. What is the ideal capital structure a business needs in its industry to remain viable? The higher the volatility (in your industry), the less debt you should have. The smaller the volatility, the more debt you can afford. Consider the capital structure of a growing company, NextGen Ltd.
Total Funds used Rs. 30 Lakh
Interest rate is 10% p.a.
Tax rate 30%
EBIT Rs. 4 Lakh
Nextgen Ltd. has an option to raise different amounts of debt:
Situation I :No Debt
Situation II:Rs. 10 Lakh Debt
Situation III:Rs. 20 Lakh Debt
Identify the correct statement.
Correct Answer
Option 1
Correct Answer
Q66:
22 May Shift 2
Business Studies > Business Finance
Easy
Passage 1: Detrimental debt
On the basis of this passage, answer the questions from Q. No. 41 to Q. No. 45
Even successful businesses have debt, but how much is too much? Learning how to manage debt is what can put you ahead. Taking on the right amount of debt can mean the difference between a business struggling to survive and one that can respond nimbly to changing economic or market conditions. A number of circumstances may justify acquiring debt. As a general rule, borrowing makes the most sense when you need to bolster cash flow or finance growth or expansion. But while debt can provide the leverage you need to grow, too much debt can strangle your business. So the question is: How much debt is too much?
A business that doesn't grow dies. You've got to grow, but you've got to grow within the financial constraints of your business. What is the ideal capital structure a business needs in its industry to remain viable? The higher the volatility (in your industry), the less debt you should have. The smaller the volatility, the more debt you can afford. Consider the capital structure of a growing company, NextGen Ltd.
Total Funds used Rs. 30 Lakh
Interest rate is 10% p.a.
Tax rate 30%
EBIT Rs. 4 Lakh
Nextgen Ltd. has an option to raise different amounts of debt:
Situation I :No Debt
Situation II:Rs. 10 Lakh Debt
Situation III:Rs. 20 Lakh Debt
What does the term "Capital Structure" imply?
Correct Answer
Option 4
Correct Answer
Q67:
22 May Shift 2
Business Studies > Business Finance
Easy
Passage 1: Detrimental debt
On the basis of this passage, answer the questions from Q. No. 41 to Q. No. 45
Even successful businesses have debt, but how much is too much? Learning how to manage debt is what can put you ahead. Taking on the right amount of debt can mean the difference between a business struggling to survive and one that can respond nimbly to changing economic or market conditions. A number of circumstances may justify acquiring debt. As a general rule, borrowing makes the most sense when you need to bolster cash flow or finance growth or expansion. But while debt can provide the leverage you need to grow, too much debt can strangle your business. So the question is: How much debt is too much?
A business that doesn't grow dies. You've got to grow, but you've got to grow within the financial constraints of your business. What is the ideal capital structure a business needs in its industry to remain viable? The higher the volatility (in your industry), the less debt you should have. The smaller the volatility, the more debt you can afford. Consider the capital structure of a growing company, NextGen Ltd.
Total Funds used Rs. 30 Lakh
Interest rate is 10% p.a.
Tax rate 30%
EBIT Rs. 4 Lakh
Nextgen Ltd. has an option to raise different amounts of debt:
Situation I :No Debt
Situation II:Rs. 10 Lakh Debt
Situation III:Rs. 20 Lakh Debt
What does EBIT stands for:
Correct Answer
Option 2
Correct Answer
Q68:
22 May Shift 1
Business Studies > Business Finance
Easy
The objective of financial management is to maximize the current price of equity shares of the company. This concept is:
Correct Answer
Option 2
Correct Answer
Q69:
22 May Shift 1
Business Studies > Business Finance
Easy
Making an investment in long term asset is related to:
Correct Answer
Option 3
Correct Answer
Q70:
22 May Shift 1
Business Studies > Business Finance
Easy
Which of the following capital is required for funding the day-to-day operations of the business?
Correct Answer
Option 3
Correct Answer
Q71:
21 May Shift 1
Business Studies > Business Finance
Easy
The mix between debt and owners fund is known as:
Correct Answer
Option 4
Correct Answer
Q72:
21 May Shift 1
Business Studies > Business Finance
Easy
Which of the following are the objectives of Financial Planning? (A) To ensure availability of funds whenever required. (B) To see that the firm does not raise funds unnecessarily. (C) Helps to cope with business shocks. (D) Helps in minimizing cost of production. Choose the correct answer from the options given below:
Correct Answer
Option 2
Correct Answer
Q73:
21 May Shift 1
Business Studies > Business Finance
Medium
Other things remaining the same, an increase in the tax rate on corporate profits will:
Correct Answer
Option 1
Correct Answer
Q74:
16 May Shift 1
Business Studies > Business Finance
Medium
Capital structure refers to the mix of own and borrowed funds. The factors affecting the choice of capital structure are: (A) Business Cycle (B) Cost of debt (C) Return on Investment (D) Cost of Equity Choose the correct answer from the options given below:
Correct Answer
Option 4
Correct Answer
Q75:
16 May Shift 1
Business Studies > Business Finance
Medium
The impact of financial leverage on the profitability of a business can be seen through:
Correct Answer
Option 1
Correct Answer
Q76:
16 May Shift 1
Business Studies > Business Finance
Easy
Which of the following is not a decision in financial management?
Correct Answer
Option 2
Correct Answer
Q77:
16 May Shift 1
Business Studies > Business Finance
Medium
Which of the following statements are correct? (A) Deciding about the capital structure of a firm involves determining the relative proportion of various types of funds. (B) Capital structure decision is essentially affected by the regulatory framework provided by the law. (C) Capital structure depends on factors like cash flow position, Return on Investment, Cost of debt & Equity etc. (D) Capital structure refers to the mix between reserves and borrowed funds. Choose the correct answer from the options given below:
Correct Answer
Option 2
Correct Answer
Q78:
16 May Shift 1
Business Studies > Business Finance
Medium
Match List-I with List-II | List-I | List-II | | --- | --- | | (A) EBIT-EPS | (I) Credit availed | | (B) Fixed capital decision | (II) Financial leverage | | (C) Working capital Decision | (III) Capital Structure | | (D) Cost of equity and debt | (IV) Financing alternatives | Choose the correct answer from the options given below:
Correct Answer
Option 2
Correct Answer
Q79:
15 May Shift 2
Business Studies > Business Finance
Easy
Which financial decision relates to committing the company's finances on a long term basis to different assets?
Correct Answer
Option 3
Correct Answer
Q80:
15 May Shift 2
Business Studies > Business Finance
Medium
The factors affecting choice of capital structure are: <ol type="A"> <li>Cash flow position</li> <li>Tax Rate</li> <li>Nature of Business</li> <li>Cost of debt</li> </ol> Choose the correct answer from the options given below:
Correct Answer
Option 1
Correct Answer
Q81:
15 May Shift 2
Business Studies > Business Finance
Medium
Match List-I with List-II | List-I | List-II | | --- | --- | | (A) Mix between owners fund and borrowed fund | (I) Financial risk | | (B) Inability of business to meet its obligation of payment of interest | (II) Capital structure | | (C) Proportion of debt and equity in overall capital | (III) Capital budgeting decision | | (D) Decisions that affect the amount of assets, competitiveness and profitability of business | (IV) Financial leverage | Choose the correct answer from the options given below:
Correct Answer
Option 3
Correct Answer
Q82:
15 May Shift 2
Business Studies > Business Finance
Easy
__________ ensures availability of finance whenever needed.
Correct Answer
Option 3
Correct Answer
Q83:
15 May Shift 2
Business Studies > Business Finance
Medium
Factors affecting the working capital requirement are: (A) Nature of Business (B) Seasonal factors (C) Credit availed (D) Stock market conditions Choose the correct answer from the options given below:
Correct Answer
Option 2
Correct Answer
Q84:
15 May Shift 2
Business Studies > Business Finance
Easy
Name the Financial Decision which determines the capital structure of the company.
Correct Answer
Option 2
Correct Answer
Q85:
15 May Shift 2
Business Studies > Business Finance
Easy
The factors affecting capital structure decisions are: (A) Fiscal policy (B) Stock market conditions (C) Control (D) Risk considerations Choose the correct answer from the options given below:
Correct Answer
Option 4
Correct Answer
Q86:
15 May Shift 1
Business Studies > Business Finance
Easy
A firm is facing difficulties managing the expenses of day-to-day operations. Which decision has the company ignored here?
Correct Answer
Option 3
Correct Answer
Q87:
15 May Shift 1
Business Studies > Business Finance
Medium
There is an increase in profit earned by equity shareholders because of the presence of fixed financial charges. This concept is:
Correct Answer
Option 2
Correct Answer
Q88:
15 May Shift 1
Business Studies > Business Finance
Easy
The primary aim of financial management is:
Correct Answer
Option 4
Correct Answer
Q89:
15 May Shift 1
Business Studies > Business Finance
Easy
The optimal combination of various sources of funds for a business is called:
Correct Answer
Option 1
Correct Answer
Q90:
14 May Shift 2
Business Studies > Business Finance
Medium
The CFO of a company wants to change the capital structure of the company. Identify the factors which affect the choice of capital structure. (A) Stock Market Condition (B) Tax Rate (C) Cost of Equity (D) Level of Competition Choose the correct answer from the options given below:
Correct Answer
Option 2
Correct Answer
Q91:
14 May Shift 2
Business Studies > Business Finance
Easy
Financial leverage is associated with which of the following? (A) $\frac{\text{Debt}}{\text{Debt + Capital}}$ (B) $\frac{\text{Debt}}{\text{Equity}}$ (C) $\frac{\text{Equity}}{\text{Debt + Capital}}$ (D) $\frac{\text{Debt}}{\text{Debt + Equity}}$ Choose the correct answer from the options given below:
Correct Answer
Option 4
Correct Answer
Q92:
14 May Shift 2
Business Studies > Business Finance
Easy
Which of the following is a long-term source of finance?
Correct Answer
Option 1
Correct Answer
Q93:
14 May Shift 2
Business Studies > Business Finance
Medium
Match List-I with List-II | List-I | List-II | | --- | --- | | Decision | Activity | | --- | --- | | (A) Long-term Investment Decision | (I) Choice of Technique | | (B) Working Capital Decision | (II) Cash Management | | (C) Fixed Capital Decision | (III) Raising capital by issuing shares/debentures | | (D) Financing Decision | (IV) Capital Budgeting | Choose the correct answer from the options given below:
Correct Answer
Option 1
Correct Answer
Q94:
14 May Shift 2
Business Studies > Business Finance
Easy
Which of the following is an important factor to be considered in long-term investment decisions?
Correct Answer
Option 4
Correct Answer
Q95:
14 May Shift 2
Business Studies > Business Finance
Easy
Which of the following is NOT a factor affecting working capital requirements?
Correct Answer
Option 4
Correct Answer
Q96:
14 May Shift 2
Business Studies > Business Finance
Easy
Money required for carrying out the business activities is known as:
Correct Answer
Option 3
Correct Answer
Q97:
14 May Shift 1
Business Studies > Business Finance
Medium
XYZ Textiles Ltd., a mid-sized manufacturer of apparel, is facing several financial management challenges. The company needs to optimize its working capital management due to increasing inventory levels and longer accounts receivable cycles. The current ratio is 1.4, but the quick ratio is low at 0.7, indicating potential liquidity issues.
XYZ Textiles is considering expanding its operations by purchasing new machinery, costing $10 million. The project is expected to generate cash flows of $2 million annually for 7 years. The management is evaluating the project using capital budgeting techniques such as NPV and IRR. The company's cost of capital (WACC) is 9%, and the calculated NPV is positive, while the IRR is 12%, suggesting the project is viable.
The company's capital structure consists of 60% equity and 40% debt. With interest rates rising, the management is weighing whether to increase debt financing to fund the expansion or issue additional equity, which could dilute shareholder control. They are also concerned about maintaining an optimal mix to minimize the weighted average cost of capital (WACC).
Finally, the company's dividend policy has been a consistent payout of 30% of net income. With expansion plans underway, the management debates whether to cut dividends to retain more earnings for reinvestment or maintain the payout to appease shareholders.
ABC Ltd. has debt equity ratio of 3:1, whereas XYZ Ltd. has debt equity ratio of 1:1. Name the advantage ABC Ltd will have over XYZ Ltd., when the rate of interest is lower than the rate of return on investment of the company.
Correct Answer
Option 1
Correct Answer
Q98:
14 May Shift 1
Business Studies > Business Finance
Easy
Arrange the following current assets, in order of liquidity. (A) Cash in hand (B) Bills receivable (C) Marketable securities (D) Finished goods inventory Choose the correct answer from the options given below:
Correct Answer
Option 2
Correct Answer
Q99:
14 May Shift 1
Business Studies > Business Finance
Medium
Read the passage and answer the following questions:
XYZ Textiles Ltd., a mid-sized manufacturer of apparel, is facing several financial management challenges. The company needs to optimize its working capital management due to increasing inventory levels and longer accounts receivable cycles. The current ratio is 1.4, but the quick ratio is low at 0.7, indicating potential liquidity issues.
XYZ Textiles is considering expanding its operations by purchasing new machinery, costing \$10 million. The project is expected to generate cash flows of \$2 million annually for 7 years. The management is evaluating the project using capital budgeting techniques such as NPV and IRR. The company's cost of capital (WACC) is 9%, and the calculated NPV is positive, while the IRR is 12%, suggesting the project is viable.
The company's capital structure consists of 60% equity and 40% debt. With interest rates rising, the management is weighing whether to increase debt financing to fund the expansion or issue additional equity, which could dilute shareholder control. They are also concerned about maintaining an optimal mix to minimize the weighted average cost of capital (WACC).
Finally, the company's dividend policy has been a consistent payout of 30% of net income. With expansion plans underway, the management debates whether to cut dividends to retain more earnings for reinvestment or maintain the payout to appease shareholders.
Working Capital management doesn't include:
Correct Answer
Option 2
Correct Answer
Q100:
14 May Shift 1
Business Studies > Business Finance
Medium
XYZ Textiles Ltd., a mid-sized manufacturer of apparel, is facing several financial management challenges. The company needs to optimize its working capital management due to increasing inventory levels and longer accounts receivable cycles. The current ratio is 1.4, but the quick ratio is low at 0.7, indicating potential liquidity issues.
XYZ Textiles is considering expanding its operations by purchasing new machinery, costing $10 million. The project is expected to generate cash flows of $2 million annually for 7 years. The management is evaluating the project using capital budgeting techniques such as NPV and IRR. The company's cost of capital (WACC) is 9%, and the calculated NPV is positive, while the IRR is 12%, suggesting the project is viable.
The company's capital structure consists of 60% equity and 40% debt. With interest rates rising, the management is weighing whether to increase debt financing to fund the expansion or issue additional equity, which could dilute shareholder control. They are also concerned about maintaining an optimal mix to minimize the weighted average cost of capital (WACC).
Finally, the company's dividend policy has been a consistent payout of 30% of net income. With expansion plans underway, the management debates whether to cut dividends to retain more earnings for reinvestment or maintain the payout to appease shareholders.
What is the consequence of increasing debt in a company's capital structure?
Correct Answer
Option 3
Correct Answer
Q101:
14 May Shift 1
Business Studies > Business Finance
Easy
Read the passage and answer the following questions:
XYZ Textiles Ltd., a mid-sized manufacturer of apparel, is facing several financial management challenges. The company needs to optimize its working capital management due to increasing inventory levels and longer accounts receivable cycles. The current ratio is 1.4, but the quick ratio is low at 0.7, indicating potential liquidity issues.
XYZ Textiles is considering expanding its operations by purchasing new machinery, costing $10 million. The project is expected to generate cash flows of $2 million annually for 7 years. The management is evaluating the project using capital budgeting techniques such as NPV and IRR. The company's cost of capital (WACC) is 9%, and the calculated NPV is positive, while the IRR is 12%, suggesting the project is viable.
The company's capital structure consists of 60% equity and 40% debt. With interest rates rising, the management is weighing whether to increase debt financing to fund the expansion or issue additional equity, which could dilute shareholder control. They are also concerned about maintaining an optimal mix to minimize the weighted average cost of capital (WACC).
Finally, the company's dividend policy has been a consistent payout of 30% of net income. With expansion plans underway, the management debates whether to cut dividends to retain more earnings for reinvestment or maintain the payout to appease shareholders.
_______ refers to the mix between owners funds and borrowed funds?
Correct Answer
Option 2
Correct Answer
Q102:
14 May Shift 1
Business Studies > Business Finance
Easy
XYZ Textiles Ltd., a mid-sized manufacturer of apparel, is facing several financial management challenges. The company needs to optimize its working capital management due to increasing inventory levels and longer accounts receivable cycles. The current ratio is 1.4, but the quick ratio is low at 0.7, indicating potential liquidity issues.
XYZ Textiles is considering expanding its operations by purchasing new machinery, costing $10 million. The project is expected to generate cash flows of $2 million annually for 7 years. The management is evaluating the project using capital budgeting techniques such as NPV and IRR. The company's cost of capital (WACC) is 9%, and the calculated NPV is positive, while the IRR is 12%, suggesting the project is viable.
The company's capital structure consists of 60% equity and 40% debt. With interest rates rising, the management is weighing whether to increase debt financing to fund the expansion or issue additional equity, which could dilute shareholder control. They are also concerned about maintaining an optimal mix to minimize the weighted average cost of capital (WACC).
Finally, the company's dividend policy has been a consistent payout of 30% of net income. With expansion plans underway, the management debates whether to cut dividends to retain more earnings for reinvestment or maintain the payout to appease shareholders.
Capital budgeting decisions are known as:
Correct Answer
Option 1
Correct Answer
Q103:
14 May Shift 1
Business Studies > Business Finance
Easy
XYZ Textiles Ltd., a mid-sized manufacturer of apparel, is facing several financial management challenges. The company needs to optimize its working capital management due to increasing inventory levels and longer accounts receivable cycles. The current ratio is 1.4, but the quick ratio is low at 0.7, indicating potential liquidity issues.
XYZ Textiles is considering expanding its operations by purchasing new machinery, costing $10 million. The project is expected to generate cash flows of $2 million annually for 7 years. The management is evaluating the project using capital budgeting techniques such as NPV and IRR. The company's cost of capital (WACC) is 9%, and the calculated NPV is positive, while the IRR is 12%, suggesting the project is viable.
The company's capital structure consists of 60% equity and 40% debt. With interest rates rising, the management is weighing whether to increase debt financing to fund the expansion or issue additional equity, which could dilute shareholder control. They are also concerned about maintaining an optimal mix to minimize the weighted average cost of capital (WACC).
Finally, the company's dividend policy has been a consistent payout of 30% of net income. With expansion plans underway, the management debates whether to cut dividends to retain more earnings for reinvestment or maintain the payout to appease shareholders.
Which of the following is an advantage of debt financing?
Correct Answer
Option 4
Correct Answer
Q104:
13 May Shift 2
Business Studies > Business Finance
Medium
The Debt Service Coverage Ratio of company A is higher than that of company B. What does this indicate?
Correct Answer
Option 1
Correct Answer
Q105:
13 May Shift 2
Business Studies > Business Finance
Medium
Match List-I with List-II | List-I | List-II | | --- | --- | | Decisions | Factors affecting the Decisions | | --- | --- | | (A) Fixed Capital Decision. | (I) Diversification | | (B) Capital Structure Decision | (II) Cash flows of the project | | (C) Working Capital Decision | (III) Control on Business | | (D) Capital budgeting decision | (IV) Business Cycle | Choose the <b>correct</b> answer from the options given below:
Correct Answer
Option 2
Correct Answer
Q106:
13 May Shift 2
Business Studies > Business Finance
Easy
What is the full form of EBIT?
Correct Answer
Option 2
Correct Answer
Q107:
13 May Shift 2
Business Studies > Business Finance
Easy
Which of the following cannot be termed as owners' funds?
Correct Answer
Option 1
Correct Answer
Q108:
13 May Shift 1
Business Studies > Business Finance
Easy
GreenTech Solutions, a renewable energy company, focuses on achieving financial stability and growth through robust financial management. The company ensures efficient allocation of business finance to expand operations, adopt new technology, and maintain a competitive edge. Its financial planning is centered on long-term sustainability, balancing profitability with eco-friendly initiatives.
To optimize its capital structure, GreenTech maintains a balanced mix of debt and equity, minimizing the cost of capital while ensuring financial flexibility. The firm undertakes thorough capital budgeting processes to evaluate projects like setting up new solar farms, ensuring only viable investments are pursued. Tools like Net Present Value (NPV) and Internal Rate of Return (IRR) guide decision-making.
GreenTech's dividend decision aligns with its growth strategy. While retaining a significant portion of earnings for reinvestment, the company ensures consistent dividends to satisfy shareholders. This approach strengthens investor confidence while funding expansion plans.
Efficient working capital management ensures smooth day-to-day operations. By optimizing cash flow, managing inventory, and negotiating favorable credit terms with suppliers, GreenTech avoids liquidity issues while meeting short-term obligations.
Through prudent financial strategies, GreenTech achieves its goal of profitability and sustainability, setting an example in the renewable energy sector.
Which component is NOT a part of GreenTech's financial management?
Correct Answer
Option 1
Correct Answer
Q109:
13 May Shift 1
Business Studies > Business Finance
Easy
GreenTech Solutions, a renewable energy company, focuses on achieving financial stability and growth through robust financial management. The company ensures efficient allocation of business finance to expand operations, adopt new technology, and maintain a competitive edge. Its financial planning is centered on long-term sustainability, balancing profitability with eco-friendly initiatives.
To optimize its capital structure, GreenTech maintains a balanced mix of debt and equity, minimizing the cost of capital while ensuring financial flexibility. The firm undertakes thorough capital budgeting processes to evaluate projects like setting up new solar farms, ensuring only viable investments are pursued. Tools like Net Present Value (NPV) and Internal Rate of Return (IRR) guide decision-making.
GreenTech's dividend decision aligns with its growth strategy. While retaining a significant portion of earnings for reinvestment, the company ensures consistent dividends to satisfy shareholders. This approach strengthens investor confidence while funding expansion plans.
Efficient working capital management ensures smooth day-to-day operations. By optimizing cash flow, managing inventory, and negotiating favorable credit terms with suppliers, GreenTech avoids liquidity issues while meeting short-term obligations.
Through prudent financial strategies, GreenTech achieves its goal of profitability and sustainability, setting an example in the renewable energy sector.
Financial Planning of a company is essentially known as ________?
Correct Answer
Option 2
Correct Answer
Q110:
13 May Shift 1
Business Studies > Business Finance
Easy
GreenTech Solutions, a renewable energy company, focuses on achieving financial stability and growth through robust financial management. The company ensures efficient allocation of business finance to expand operations, adopt new technology, and maintain a competitive edge. Its financial planning is centered on long-term sustainability, balancing profitability with eco-friendly initiatives.
To optimize its capital structure, GreenTech maintains a balanced mix of debt and equity, minimizing the cost of capital while ensuring financial flexibility. The firm undertakes thorough capital budgeting processes to evaluate projects like setting up new solar farms, ensuring only viable investments are pursued. Tools like Net Present Value (NPV) and Internal Rate of Return (IRR) guide decision-making.
GreenTech's dividend decision aligns with its growth strategy. While retaining a significant portion of earnings for reinvestment, the company ensures consistent dividends to satisfy shareholders. This approach strengthens investor confidence while funding expansion plans.
Efficient working capital management ensures smooth day-to-day operations. By optimizing cash flow, managing inventory, and negotiating favorable credit terms with suppliers, GreenTech avoids liquidity issues while meeting short-term obligations.
Through prudent financial strategies, GreenTech achieves its goal of profitability and sustainability, setting an example in the renewable energy sector.
What does GreenTech prioritize in working capital management?
Correct Answer
Option 4
Correct Answer
Q111:
13 May Shift 1
Business Studies > Business Finance
Easy
GreenTech Solutions, a renewable energy company, focuses on achieving financial stability and growth through robust financial management. The company ensures efficient allocation of business finance to expand operations, adopt new technology, and maintain a competitive edge. Its financial planning is centered on long-term sustainability, balancing profitability with eco-friendly initiatives.
To optimize its capital structure, GreenTech maintains a balanced mix of debt and equity, minimizing the cost of capital while ensuring financial flexibility. The firm undertakes thorough capital budgeting processes to evaluate projects like setting up new solar farms, ensuring only viable investments are pursued. Tools like Net Present Value (NPV) and Internal Rate of Return (IRR) guide decision-making.
GreenTech's dividend decision aligns with its growth strategy. While retaining a significant portion of earnings for reinvestment, the company ensures consistent dividends to satisfy shareholders. This approach strengthens investor confidence while funding expansion plans.
Efficient working capital management ensures smooth day-to-day operations. By optimizing cash flow, managing inventory, and negotiating favorable credit terms with suppliers, GreenTech avoids liquidity issues while meeting short-term obligations.
Through prudent financial strategies, GreenTech achieves its goal of profitability and sustainability, setting an example in the renewable energy sector.
What is the primary goal of financial management?
Correct Answer
Option 2
Correct Answer
Q112:
13 May Shift 1
Business Studies > Business Finance
Easy
GreenTech Solutions, a renewable energy company, focuses on achieving financial stability and growth through robust financial management. The company ensures efficient allocation of business finance to expand operations, adopt new technology, and maintain a competitive edge. Its financial planning is centered on long-term sustainability, balancing profitability with eco-friendly initiatives.
To optimize its capital structure, GreenTech maintains a balanced mix of debt and equity, minimizing the cost of capital while ensuring financial flexibility. The firm undertakes thorough capital budgeting processes to evaluate projects like setting up new solar farms, ensuring only viable investments are pursued. Tools like Net Present Value (NPV) and Internal Rate of Return (IRR) guide decision-making.
GreenTech's dividend decision aligns with its growth strategy. While retaining a significant portion of earnings for reinvestment, the company ensures consistent dividends to satisfy shareholders. This approach strengthens investor confidence while funding expansion plans.
Efficient working capital management ensures smooth day-to-day operations. By optimizing cash flow, managing inventory, and negotiating favorable credit terms with suppliers, GreenTech avoids liquidity issues while meeting short-term obligations.
Through prudent financial strategies, GreenTech achieves its goal of profitability and sustainability, setting an example in the renewable energy sector.
Which process evaluates the viability of long-term investment projects?
Correct Answer
Option 1
Correct Answer
Q113:
CUET Business Studies 2024 Slot 1
Business Studies > Business Finance
Easy
Financial management aims at choosing the best investment and financing alternatives by focusing on their costs and benefits. Its objective is to:
Correct Answer
Option 1
Correct Answer
Q114:
CUET Business Studies 2024 Slot 1
Business Studies > Business Finance
Medium
A proper matching of funds requirements and their availability is sought to be achieved by _______.
Correct Answer
Option 1
Correct Answer
Q115:
CUET Business Studies 2024 Slot 1
Business Studies > Business Finance
Medium
Debt is _______ but is more _______ for a business, the payment of interest and the return of principal is obligatory for the business.
Correct Answer
Option 1
Correct Answer
Q116:
29 May Shift 2
Business Studies > Business Finance
Medium
Match List I with List II | LIST I | | LIST II | |---|---|---| | A. District Commission | I. | One crore to Ten crore rupees | | B. State Commission | II. | Appeal against National Commission in matter of its original jurisdiction. | | C. National Commission | III. | Upto one crore rupees | | D. Supreme Court | IV. | Exceeds Ten crore rupees | Choose the correct answer from the options given below:
Correct Answer
Option 3
Correct Answer
Q117:
29 May Shift 2
Business Studies > Business Finance
Medium
Match List I with List II | LIST I | | LIST II | |---|---|---| | A. Regulatory Function of SEBI | I. | Levying fee or other charges | | B. Development Function of SEBI | II. | Training of intermediaries | | C. Protective Function of SEBI | III. | Controlling insider training | | D. Objective of SEBI | IV. | Regulate stock exchanges | Choose the correct answer from the options given below:
Correct Answer
Option 2
Correct Answer
Q118:
29 May Shift 2
Business Studies > Business Finance
Easy
Which element of Marketing Mix refers to activities that make firm's product available to the target customers?
Correct Answer
Option 2
Correct Answer
Q119:
29 May Shift 2
Business Studies > Business Finance
Easy
Identify the market that is known as Stock Exchange
Correct Answer
Option 1
Correct Answer
Q120:
29 May Shift 2
Business Studies > Business Finance
Medium
As per Consumer Protection Act, 2019, State commission has a jurisdiction to entertain complaints where value of goods and services paid as consideration:-
Correct Answer
Option 2
Correct Answer
Q121:
29 May Shift 2
Business Studies > Business Finance
Easy
Arrange the Channels of Distribution in order for a consumer product A. Consumer B. Retailer C. Wholesaler D. Producer Choose the correct answer from the option given below:
Correct Answer
Option 2
Correct Answer
Q122:
29 May Shift 2
Business Studies > Business Finance
Easy
Identify for the following under whose overall administrative control, SEBI functions
Correct Answer
Option 3
Correct Answer
Q123:
29 May Shift 2
Business Studies > Business Finance
Medium
Match List I with List II | LIST I | | LIST II | |---|---|---| | A. Convenience products | I. | Consumed in one or few uses | | B. Shopping products | II. | Brand loyality of the highest order | | C. Speciality products | III. | Purchased frequently | | D. Non durable products | IV. | Buyers devote considerable time | Choose the correct answer from the options given below:
Correct Answer
Option 1
Correct Answer
Q124:
29 May Shift 2
Business Studies > Business Finance
Medium
Match List I with List II | LIST I | | LIST II | |---|---|---| | A. Treasury Bill | I. | Mobilise large amount of money | | B. Commercial paper | II. | Maturity period of one day to fifteen days | | C. Call money | III. | Maturity period of 15 days to one year | | D. Certificate of Deposit | IV. | Issued by RBI | Choose the correct answer from the options given below:
Correct Answer
Option 3
Correct Answer
Q125:
29 May Shift 2
Business Studies > Business Finance
Medium
Which Marketing Management philosophy has main focus on existing product?
Correct Answer
Option 1
Correct Answer
Q126:
29 May Shift 2
Business Studies > Business Finance
Easy
The primary aim of financial management is :-
Correct Answer
Option 3
Correct Answer
Q127:
29 May Shift 2
Business Studies > Business Finance
Medium
Identify the rights provided to consumers by the Consumer Protection Act 2019 A. Right to Safety B. Right to be Informed C. Right to choose D. Right to be heard E. Right to be assured Choose the correct answer from the options given below:
Correct Answer
Option 3
Correct Answer
Q128:
29 May Shift 2
Business Studies > Business Finance
Easy
Select from following who is considered Risk taker
Correct Answer
Option 3
Correct Answer
Q129:
29 May Shift 2
Business Studies > Business Finance
Medium
Arrange the steps of Trading and Settlement procedure in Securities A. Open a demat account B. Place an order with the broker C. Sign a broker-client agreement D. Broker match the share price available E. Broker issue a trade confirmation slip Choose the correct answer from the options given below:
Correct Answer
Option 3
Correct Answer
Q130:
29 May Shift 2
Business Studies > Business Finance
Medium
Capital structure should emphasize on:-
Correct Answer
Option 3
Correct Answer
Q131:
29 May Shift 2
Business Studies > Business Finance
Easy
Identify the trend in stock market when equity shares are more easily sold even at higher price
Correct Answer
Option 2
Correct Answer
Q132:
28 May Shift 2
Business Studies > Business Finance
Medium
Identify the factor which does not affect the financing decision of an organisation :
Correct Answer
Option 3
Correct Answer
Q133:
28 May Shift 2
Business Studies > Business Finance
Medium
Identify the pair which does not affect the choice of capital structure :
Correct Answer
Option 2
Correct Answer
Q134:
28 May Shift 2
Business Studies > Business Finance
Medium
Match List - I with List - II. | List - I | List - II | |---|---| | (A) The mix between owners' and borrowed funds | (I) Financial Planning | | (B) Quantum of finance to be raised from various long term sources | (II) Investment Decisions | | (C) How the firm's funds are invested | (III) Capital Structure | | (D) Financial blue print of an organisation | (IV) Financing Decisions | Choose the correct answer from the options given below :
Correct Answer
Option 3
Correct Answer
Q135:
28 May Shift 2
Business Studies > Business Finance
Medium
Identify the correct statements in the context of financial decision : (A) Financial decision includes investment decision, financing decision and dividend decision (B) Short term investment decision is also known as 'capital budgeting decision' (C) Short term investment decision is also known as 'Working capital decision' (D) Investment decision includes raising funds from equity or debt (E) Investment decision includes short term and long term investment decision Choose the correct answer from the options given below :
Correct Answer
Option 1
Correct Answer
Q136:
6 Oct Shift 1
Business Studies > Business Finance
Easy
The cost in the process of raising fund through equity is known as _____.
Correct Answer
Option 3
Correct Answer
Q137:
6 Oct Shift 1
Business Studies > Business Finance
Easy
A trading organisation comparatively needs _____ investment in fixed assets as compared to a manufacturing organisation
Correct Answer
Option 1
Correct Answer
Q138:
6 Oct Shift 1
Business Studies > Business Finance
Medium
Rajat is planning the break up of his finance to know the amount of capital that he will utilize to purchase fixed assets and current assets. Identify the financial decision taken by Rajat
Correct Answer
Option 1
Correct Answer
Q139:
6 Oct Shift 1
Business Studies > Business Finance
Medium
Debt normally does not cause _____.
Correct Answer
Option 1
Correct Answer
Q140:
30 Aug Shift 1
Business Studies > Business Finance
Medium
Dividend decision is affected by many factors. Identify the factors affecting dividend decisions. (a) State of Capital market (b) Control Consideration (c) Shareholder's Preference (d) Taxation Policy (e) Floatation Cost Choose the most appropriate answer from the options given below :
Correct Answer
Option 2
Correct Answer
Q141:
30 Aug Shift 1
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 concept of Financial Management being mentioned in the above case.
Correct Answer
Option 2
Correct Answer
Q142:
30 Aug Shift 1
Business Studies > Business Finance
Medium
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.
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 (c) To prepare financial budget (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 :
Correct Answer
Option 4
Correct Answer
Q143:
30 Aug Shift 1
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.
Correct Answer
Option 1
Correct Answer
Q144:
30 Aug Shift 1
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 of Mr. Gulati about the requirement of finance to be raised for the company from various sources.
Correct Answer
Option 3
Correct Answer
Q145:
20 Aug Shift 1
Business Studies > Business Finance
Medium
Identify the factors which affect the dividend decision. A. Stock market Reaction B. Floatation Cost C. Legal Constraints D. Fixed operating cost E. Cost of equity
Correct Answer
Option 1
Correct Answer
Q146:
20 Aug Shift 1
Business Studies > Business Finance
Easy
Match the following components with the given information | List I | List II | |---|---| | A. Capital structure | I. Speculator who expects the prices to go down | | B. Bear | II. Speculator expecting a rise in the prices | | C. Bull | III. Proportion of debt and equality in total Capital | | D. Shareholder's Wealth | IV. Maximisation of the market value of equity shares |
Correct Answer
Option 1
Correct Answer
Q147:
20 Aug Shift 1
Business Studies > Business Finance
Easy
"A company has the policy of giving liberal credit to its customers in order to increase the sales." Identify the factor affecting working capital requirement in the above situation.
Correct Answer
Option 4
Correct Answer
Q148:
20 Aug Shift 1
Business Studies > Business Finance
Easy
Given below are the examples of current Assets. Identify which of them is highly liquid?
Correct Answer
Option 2
Correct Answer
Q149:
20 Aug Shift 1
Business Studies > Business Finance
Hard
Radha Ltd has invested Rs. 100,000 in the business. Out of which Rs. 70000 is equity and Rs. 30,000 is debt. Net Profit after tax is 24,000. Calculate ROI
Correct Answer
Option 1
Correct Answer
Q150:
20 Aug Shift 1
Business Studies > Business Finance
Medium
Under which of the following situation, a company is likely to get the benefit of trading on equity?
Correct Answer
Option 2
Correct Answer
Q151:
17 Aug Shift 1
Business Studies > Business Finance
Easy
Identify the financial concept which refers to the preparation of financial blueprint of an organisation's future operation.
Correct Answer
Option 2
Correct Answer
Q152:
17 Aug Shift 1
Business Studies > Business Finance
Easy
Name the primary objective of Financial Management.
Correct Answer
Option 4
Correct Answer
Q153:
17 Aug Shift 1
Business Studies > Business Finance
Medium
Match List I with List II | List I | List II | |---|---| | A. Investment decisions | I. Source of raising finance | | B. Financing decisions | II. Proportion of debt and equity | | C. Dividend decisions | III. Long term or short term assets | | D. Capital Structure | IV. Amount of money to be retained | Choose the correct answer from the options given below:
Correct Answer
Option 4
Correct Answer
Q154:
17 Aug Shift 1
Business Studies > Business Finance
Easy
It refers to a position when a company is unable to meet its fixed financial charges namely interest payment, preference dividend and repayment obligations. Name the concept highlighted in the above lines:
Correct Answer
Option 3
Correct Answer
Q155:
17 Aug Shift 1
Business Studies > Business Finance
Easy
From the following source of finance, identify the source that is not related to Owner's fund:
Correct Answer
Option 4
Correct Answer
Q156:
17 Aug Shift 1
Business Studies > Business Finance
Easy
The primary aim of financial management is to maximise Shareholder's wealth through proper planning of finance and preparation of a financial blue print of an organisation's future operations. Identify the term being reflected here.
Correct Answer
Option 2
Correct Answer
Q157:
16 July Shift 2
Business Studies > Business Finance
Easy
Ownership Capital is also known as:
Correct Answer
Option 2
Correct Answer
Q158:
16 July Shift 2
Business Studies > Business Finance
Easy
Current assets are those assets which get converted into cash within
Correct Answer
Option 3
Correct Answer
Q159:
16 July Shift 2
Business Studies > Business Finance
Medium
Ramanuj is thinking of starting an advertising agency. What will be the amount of working capital requirement for him?
Correct Answer
Option 1
Correct Answer
Q160:
16 July Shift 2
Business Studies > Business Finance
Medium
During a bearish phase of stock market, company should make use of _____.
Correct Answer
Option 2
Correct Answer
Q161:
16 July Shift 2
Business Studies > Business Finance
Easy
Computers become obsolete fast and are replaced much sooner than furniture. The requirement of fixed capital, hence, is more for the firms dealing in computers. Identify the factor affecting fixed capital from the above para.
Correct Answer
Option 3
Correct Answer
Q162:
16 July Shift 2
Business Studies > Business Finance
Medium
'The decision determines the overall cost of capital and the financial risk of the enterprises.' Which decision is highlighted in the above statement?
Correct Answer
Option 4
Correct Answer
Q163:
15 July Shift 2
Business Studies > Business Finance
Medium
Identify one statement among the following that is NOT true about capital budgeting:
Correct Answer
Option 3
Correct Answer
Q164:
15 July Shift 2
Business Studies > Business Finance
Medium
A company will tend to pay lower rate of dividend if ___
Correct Answer
Option 2
Correct Answer
Q165:
15 July Shift 2
Business Studies > Business Finance
Easy
It is a process of estimating the fund requirement of a business and specifying the sources of funds
Correct Answer
Option 3
Correct Answer
Q166:
15 July Shift 2
Business Studies > Business Finance
Easy
A firm's ability to borrow at a lower rate
Correct Answer
Option 2
Correct Answer
Q167:
15 July Shift 2
Business Studies > Business Finance
Medium
Arrange the following current assets in order of their liquidity A. Prepaid expenses B. Raw Material C. Debtors D. Finished goods inventory E. Bills receivable Choose the correct answer from the options given below:
Correct Answer
Option 3
Correct Answer