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CBSE Notes 2011-2012 » Financial Management/Business Finance - Class 12 Business Studies MCQs (Free Practice Test)

Financial Management/Business Finance - Class 12 Business Studies MCQs (Free Practice Test)


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A select subset of questions has been made available here.
You can use this for preparation purpose.
Once you are ready, click on 'Take Quiz' to start the QUIZ.
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Question :

Current assets of a business firm should be financed through


Answer :

a current liability only
long-term liability only
partly from both types, i.e., loan and short-term liabilities


Question :

Higher working capital usually results in


Answer :

higher current ratio, higher risk and higher profits
lower current ratio, higher risk and profits
higher equitably, lower risk and lower profits
lower equitably, lower risk and higher profits


Question :

Companies with higher growth paternal are likely to


Answer :

pay lower dividends
pay higher dividends
dividends are not affected by growth considerations
none of the above


Question :

Financial planning arrives at


Answer :

minimising the external borrowing by resorting to equity shares
ensuring that the firm always have significantly more funds than required so that there is no paucit> of funds
ensuring that the firm faces neither a shortage nor a glut of unusable funds
ensuring that the firm faces neither a shortage nor a glut of unusable funds


Question :

Current assets are those assets which get converted into cash


Answer :

within six months
within one year
between one and three years
between three and five years


Question :

The cheapest source of finance is


Answer :

debenture
equity share capita
preference share
retained earnings


Question :

A fixed asset should be financed through


Answer :

a long-term liability
a short-term liability
a mix of long and short-term liabilities


Question :

A decision to acquire a new and modern plant to upgrade an old one is a


Answer :

financing decision
equity share capital
investment decision
dividend decision


Question :

Financial leverage is called favourable if


Answer :

Return on Investment is lower than cost of debt
ROI is higher than cost of debt
Debt is nearly available
If the degree of existing financial leverage is low


Question :

Other things remaining the same, an increase in the tax rate on corporate profits will


Answer :

make debt relatively cheaper
make debt relatively less cheap at home
no impact on the cost of debt
we can't say