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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 :

Higher dividends per share is associated with


Answer :

high earnings, high cash flows, unusable earnings and higher growth opportunities
high earnings, high cash flows, stable earnings and high growth opportunities
high earnings, high cash flows, stable earnings and lower growth opportunities
high earnings, low cash flows, stable earnings and lower growth opportunities


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 :

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 :

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


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 :

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 :

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 :

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 :

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 :

The cheapest source of finance is


Answer :

debenture
equity share capita
preference share
retained earnings