CUET Business Studies - Business Studies - Business Finance | Free Questions

Q1:

2026: 6 June Shift 1

Business Studies

>

Business Finance

Medium

Ms Pooja has a manufacturing business of winter clothes in Raipur, Chattisgarh with an annual demand of 50,000 units. Suggest the factors that she needs to consider while deciding on the requirement of fixed capital for the business.

(A) Scale of operations

(B) Choice of Technique

(C) Growth Prospects

(D) Business Cycle

Choose the correct answer from the options given below:

(A) and (D) only

(A), (B) and (C) only

(A), (B) and (D) only

(B), (C) and (D) only

Correct Answer

Option 2

Correct Answer

Explanation

Q2:

2026: 6 June Shift 1

Business Studies

>

Business Finance

Easy

A higher Debt Service Coverage Ratio (DSCR) indicates

Inability of company to meet cash commitments.

Better ability of the company to meet its cash commitments

No change in company's potential regarding the debt component in its capital structure.

Company's potential to reduce the debt component in its capital structure

Correct Answer

Option 2

Correct Answer

Explanation

Q3:

2026: 6 June Shift 1

Business Studies

>

Business Finance

Easy

Financial Planning aims at enabling the company to tackle the ________ in respect of the availability and timing of the funds and helps in smooth functioning of an organisation.

Demand

Uncertainity

Supply

Certainity

Correct Answer

Option 2

Correct Answer

Explanation

Q4:

2026: 6 June Shift 1

Business Studies

>

Business Finance

Medium

The Financing Decisions are affected by:

(A) Floatation Costs

(B) Cash Flow Position of the Company

(C) Fixed Operating Costs

(D) Taxation Policy

Choose the correct answer from the options given below:

(A), (B) and (D) only

(A), (C) and (D) only

(A), (B) and (C) only

(B), (C) and (D) only

Correct Answer

Option 3

Correct Answer

Explanation

Q5:

2026: 6 June Shift 1

Business Studies

>

Business Finance

Easy

"In peak season because of higher level of activity, larger amount of working capital is required and vice versa". Which factor is being considered here for deciding the working capital requirements?

Business Cycle

Seasonal factors

Operating efficiency

Growth Prospects

Correct Answer

Option 2

Correct Answer

Explanation

Q6:

2026: 6 June Shift 1

Business Studies

>

Business Finance

Medium

Match List-I with List-II

List-I (Factors affecting decisions)	List-II (Decision)
(A) Stability of Earnings	(I) Financing decision
(B) Fixed Operating Costs	(II) Dividend decision
(C) Diversification	(III) Fixed Capital decision
(D) Production Cycle	(IV) Working Capital decision

Choose the correct answer from the options given below:

(A) - (I), (B) - (II), (C) - (III), (D) - (IV)

(A) - (IV), (B) - (II), (C) - (III), (D) - (I)

(A) - (III), (B) - (II), (C) - (IV), (D) - (I)

(A) - (II), (B) - (I), (C) - (III), (D) - (IV)

Correct Answer

Option 4

Correct Answer

Explanation

Q7:

2026: 31 May Shift 1

Business Studies

>

Business Finance

Medium

Match the LIST-I with LIST-II

LIST-I (Factor affecting Fixed capital requirements)	LIST-II (Explanation)
A. Choice of Technique	I. Organizations that use assets which are prone to obsolescence require higher fixed capital.
B. Level of Collaboration	II. A developed financial market may provide leasing facilities as an alternative to outright purchase.
C. Financing Alternatives	III. Certain business organisations share each other's facilities.
D. Technology Upgradation	IV. A capital-intensive organisation requires higher investment in plant.

Choose the correct answer from the options given below:

A-IV, B-III, C-II, D-I

A-I, B-II, C-III, D-IV

A-I, B-II, C-IV, D-III

A-III, B-IV, C-I, D-II

Correct Answer

Option 1

Correct Answer

Explanation

Q8:

2026: 31 May Shift 1

Business Studies

>

Business Finance

Easy

Sehaj joined his father's business of Organic masalas, near Baddi in Himachal after completing his MBA. In order to capture a major share of the market, he decided to sell the product in small attractive packages by using the latest packaging technology and machinery. He believed that this project has huge financial potential in terms of sales and cash flows. Father asked Sehaj to prepare a financial blueprint for the organization's future operations. His father suggested that they hire financial consultants to help them with various sources of funds. The consultant enlisted various sources of finance and their associated costs of public issue to determine the optimal source(s) of finance. The consultant also referred to certain guidelines issued by SEBI.

"Father asked Sehaj to prepare a financial blueprint for the organization's future operations." Identify the financial concept discussed here.

Wealth maximisation

Trading on equity

Optimum capital structure

Financial planning

Correct Answer

Option 4

Correct Answer

Explanation

Q9:

2026: 31 May Shift 1

Business Studies

>

Business Finance

Medium

Sehaj joined his father's business of Organic masalas, near Baddi in Himachal after completing his MBA. In order to capture a major share of the market, he decided to sell the product in small attractive packages by using the latest packaging technology and machinery. He believed that this project has huge financial potential in terms of sales and cash flows. Father asked Sehaj to prepare a financial blueprint for the organization's future operations. His father suggested that they hire financial consultants to help them with various sources of funds. The consultant enlisted various sources of finance and their associated costs of public issue to determine the optimal source(s) of finance. The consultant also referred to certain guidelines issued by SEBI.

Which factor affecting the financing decision was taken into consideration by the consultant?

Cost

Control consideration

Floatation costs

Cash flow position of business

Correct Answer

Option 3

Correct Answer

Explanation

Q10:

2026: 31 May Shift 1

Business Studies

>

Business Finance

Easy

Sehaj joined his father's business of Organic masalas, near Baddi in Himachal after completing his MBA. In order to capture a major share of the market, he decided to sell the product in small attractive packages by using the latest packaging technology and machinery. He believed that this project has huge financial potential in terms of sales and cash flows. Father asked Sehaj to prepare a financial blueprint for the organization's future operations. His father suggested that they hire financial consultants to help them with various sources of funds. The consultant enlisted various sources of finance and their associated costs of public issue to determine the optimal source(s) of finance. The consultant also referred to certain guidelines issued by SEBI.

The father has consulted Financial Consultants to help with which decision?

Financing

Investment

Dividend

Marketing

Correct Answer

Option 1

Correct Answer

Explanation

Q11:

2026: 31 May Shift 1

Business Studies

>

Business Finance

Easy

Sehaj joined his father's business of Organic masalas, near Baddi in Himachal after completing his MBA. In order to capture a major share of the market, he decided to sell the product in small attractive packages by using the latest packaging technology and machinery. He believed that this project has huge financial potential in terms of sales and cash flows. Father asked Sehaj to prepare a financial blueprint for the organization's future operations. His father suggested that they hire financial consultants to help them with various sources of funds. The consultant enlisted various sources of finance and their associated costs of public issue to determine the optimal source(s) of finance. The consultant also referred to certain guidelines issued by SEBI.

"The consultant also referred to certain guidelines issued by SEBI" Identify the factor affecting capital structure decision referred to here.

Control

Regulatory framework

Stock market conditions

Flexibility

Correct Answer

Option 2

Correct Answer

Explanation

Q12:

2026: 31 May Shift 1

Business Studies

>

Business Finance

Easy

Sehaj joined his father's business of Organic masalas, near Baddi in Himachal after completing his MBA. In order to capture a major share of the market, he decided to sell the product in small attractive packages by using the latest packaging technology and machinery. He believed that this project has huge financial potential in terms of sales and cash flows. Father asked Sehaj to prepare a financial blueprint for the organization's future operations. His father suggested that they hire financial consultants to help them with various sources of funds. The consultant enlisted various sources of finance and their associated costs of public issue to determine the optimal source(s) of finance. The consultant also referred to certain guidelines issued by SEBI.

Which financial decision is highlighted in the line, "In order to capture a major share of the market, he decided to sell the product in small attractive packages by using the latest packaging technology and machinery."

Financing

Investment

Dividend

Marketing

Correct Answer

Option 2

Correct Answer

Explanation

Q13:

2026: 29 May Shift 2

Business Studies

>

Business Finance

Easy

The Financing Decision is:

Related to how the firm's funds are invested in different assets

The decision about the quantum of finance to be raised from various sources

Related to how and what portion of profit is distributed to shareholders

Related to the selection of best financing alternative or best investment alternative

Correct Answer

Option 2

Correct Answer

Explanation

Q14:

2026: 29 May Shift 2

Business Studies

>

Business Finance

Medium

Identify the current asset which has the least liquidity:

Marketable securities

Debtors

Work in progress

Raw materials

Correct Answer

Option 4

Correct Answer

Explanation

Q15:

2026: 29 May Shift 2

Business Studies

>

Business Finance

Medium

Identify the correct decision that is affected by the following factors

-Seasonal factors

-Availability of raw material

-Scale of operations

-Inflation

Choose the correct answer from the options given below:

The choice of capital structure

The requirement for fixed capital

The working capital requirements

The Dividend decision

Correct Answer

Option 3

Correct Answer

Explanation

Q16:

2026: 29 May Shift 2

Business Studies

>

Business Finance

Medium

The requirement of Fixed Capital isn't affected by:

Scale of operations

Nature of business

Capital structure of other companies

Financing alternatives

Correct Answer

Option 3

Correct Answer

Explanation

Q17:

2026: 29 May Shift 2

Business Studies

>

Business Finance

Easy

The Capital Budgeting Decisions are not affected by:

Cash flow of the projects

The rate of return

Stock market conditions

The investment criteria involved

Correct Answer

Option 3

Correct Answer

Explanation

Q18:

2026: 29 May Shift 2

Business Studies

>

Business Finance

Easy

"Interest coverage ratio" can be computed as:

$PAT/Interest$

$EBIT/Interest$

$EBIT/(Interest + Depreciation)$

$PAT/(Interest + Depreciation)$

Correct Answer

Option 2

Correct Answer

Explanation

Q19:

2026: 29 May Shift 1

Business Studies

>

Business Finance

Easy

The primary aim of Financial Management is to maximise _______.

Organisations' Profit

Initial Price of Shares

Shareholders' Wealth

Employees' Salary

Correct Answer

Option 3

Correct Answer

Explanation

Q20:

2026: 29 May Shift 1

Business Studies

>

Business Finance

Easy

Hind Beverages

Hind Beverages Inc., the leading soft drink and drinking water company in the private sector, has acquired Himalayan Water Co., in a deal worth $8.6 billion in 2007 to further expand its market share. A financial decision of this magnitude has significant implicitness for both Hind Beverages Inc and Himalayan Water as well as their employees and shareholders.

Hind Beverages Inc. raised a debt of over $8 billion to finance the transaction. This financing decision affected the capital structure of the acquirer.

What will be the net effect on the acquirer company's capital structure after the acquisition?

Financial risk will increase

Financial risk will decrease

Operating risk will increase

Operating risk will decrease

Correct Answer

Option 1

Correct Answer

Explanation

Q21:

2026: 29 May Shift 1

Business Studies

>

Business Finance

Easy

Hind Beverages

Hind Beverages Inc., the leading soft drink and drinking water company in the private sector, has acquired Himalayan Water Co., in a deal worth $8.6 billion in 2007 to further expand its market share. A financial decision of this magnitude has significant implicitness for both Hind Beverages Inc and Himalayan Water as well as their employees and shareholders.

Hind Beverages Inc. raised a debt of over $8 billion to finance the transaction. This financing decision affected the capital structure of the acquirer.

What may be the reason behind the acquisition of Himalayan Water Co. by Hind Beverages Inc.?

Control over shareholders of Himalayan Water Co.

Revenge on a rival company

Expansion of business

Maximising profit only

Correct Answer

Option 3

Correct Answer

Explanation

Q22:

2026: 29 May Shift 1

Business Studies

>

Business Finance

Easy

Hind Beverages

Hind Beverages Inc., the leading soft drink and drinking water company in the private sector, has acquired Himalayan Water Co., in a deal worth $8.6 billion in 2007 to further expand its market share. A financial decision of this magnitude has significant implicitness for both Hind Beverages Inc and Himalayan Water as well as their employees and shareholders.

Hind Beverages Inc. raised a debt of over $8 billion to finance the transaction. This financing decision affected the capital structure of the acquirer.

Identify the source of debt that a company might have used to raise $8 billion to finance the transaction.

Equity Shares

Debentures

Preference Shares

Retained Earnings

Correct Answer

Option 2

Correct Answer

Explanation

Q23:

2026: 29 May Shift 1

Business Studies

>

Business Finance

Medium

Hind Beverages

Hind Beverages Inc., the leading soft drink and drinking water company in the private sector, has acquired Himalayan Water Co., in a deal worth $8.6 billion in 2007 to further expand its market share. A financial decision of this magnitude has significant implicitness for both Hind Beverages Inc and Himalayan Water as well as their employees and shareholders.

Hind Beverages Inc. raised a debt of over $8 billion to finance the transaction. This financing decision affected the capital structure of the acquirer.

Why might a company prefer debt over equity for financing?

Debt financing does not affect earnings per share.

Debt financing is safe

No obligation of payment in case of liquidation

Retain Control over business

Correct Answer

Option 4

Correct Answer

Explanation

Q24:

2026: 29 May Shift 1

Business Studies

>

Business Finance

Easy

Hind Beverages

Hind Beverages Inc., the leading soft drink and drinking water company in the private sector, has acquired Himalayan Water Co., in a deal worth $8.6 billion in 2007 to further expand its market share. A financial decision of this magnitude has significant implicitness for both Hind Beverages Inc and Himalayan Water as well as their employees and shareholders.

Hind Beverages Inc. raised a debt of over $8 billion to finance the transaction. This financing decision affected the capital structure of the acquirer.

Which of the following statements is NOT correct about capital structure?

Capital structure can be measured by debt-equity ratio.

Capital structure reflects the mix of debt and equity

A higher proportion of debt is always desired

The capital structure of a company affects both profitability and financial risk.

Correct Answer

Option 3

Correct Answer

Explanation

Q25:

2026: 24 May Shift 1

Business Studies

>

Business Finance

Easy

Match List-I with List-II

List-I (Concepts of Financial management)	List-II (Computation)
(A) Net Working Capital	(I) Debt/Equity
(B) Financial Leverage	(II) (Profit after tax + Depreciation + Interest + Non Cash exp.) / (Pref. Div + Interest + Repayment obligation)
(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:

(A) - (I), (B) - (II), (C) - (III), (D) - (IV)

(A) - (I), (B) - (II), (C) - (IV), (D) - (III)

(A) - (III), (B) - (I), (C) - (IV), (D) - (II)

(A) - (III), (B) - (IV), (C) - (I), (D) - (II)

Correct Answer

Option 3

Correct Answer

Explanation

Q26:

2026: 24 May Shift 1

Business Studies

>

Business Finance

Easy

Long term financial planning focuses on which kind of programmes?

Budget plans

Capital Expenditure programmes

Six months investment programmes

Dividend payout plan in the next quarter

Correct Answer

Option 2

Correct Answer

Explanation

Q27:

2026: 24 May Shift 1

Business Studies

>

Business Finance

Easy

Increased use of debt, is likely to ________ of the firm provided that the cost of equity remains unaffected.

Higher the over-all cost of capital

Lower the over-all cost of capital

Have no effect on the over-all cost of capital

Lower the over-all investment of capital

Correct Answer

Option 2

Correct Answer

Explanation

Q28:

2026: 24 May Shift 1

Business Studies

>

Business Finance

Medium

Select the factors to be considered while making financing decisions in a company:

(A) Fixed operating costs

(B) Cash Flow Position

(C) Stability of Earnings

(D) State of Capital Markets

Choose the correct answer from the options given below:

(A), (B) and (D) only

(A), (C) and (D) only

(A), (B), (C) and (D)

(B), (C) and (D) only

Correct Answer

Option 1

Correct Answer

Explanation

Q29:

2026: 24 May Shift 1

Business Studies

>

Business Finance

Easy

What is the other name of long-term investment decisions?

Working Capital Decision

Dividend Decision

Financing Decision

Capital Budgeting Decision

Correct Answer

Option 4

Correct Answer

Explanation

Q30:

2026: 24 May Shift 1

Business Studies

>

Business Finance

Easy

What is the primary aim of financial management in an organization?

To minimize the risk of investors

To maximize the profit of company

To minimize the loss of owner

To maximize the wealth of shareholders

Correct Answer

Option 4

Correct Answer

Explanation

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