Class 12 Financial Management CBSE Questions & Answers

Class 12 · Financial Management

This is Business Studies class 12 Financial Management CBSE Questions & Answers. There are 15 questions in this test with each question having around four answer choices.

Questions & Answers

1
Long term investment decision is also known as _____________
  • A
    Working Capital
  • B
    None of these
  • C
    Dividend Decision
  • D
    Capital Budgeting
    Correct
2
Short-term Investment Decision is also known as ____
  • A
    Dividend Decision
  • B
    Capital Budgeting
  • C
    None of these
  • D
    Working capital
    Correct
3
Which of the following is not concerned with the Long term investment decision
  • A
    Opening a new branch
  • B
    Inventory management
    Correct
  • C
    Research and Development Programme
  • D
    Management of fixed capital
4
Which of the following affects capital budgeting decision?
  • A
    Cash Flow of the Project
  • B
    Investment Criteria and interest rate
  • C
    Rate of Return
  • D
    All of these
    Correct
5
Short term investment decisions affect the ___________
  • A
    Long term profitability
  • B
    Large amount of funds for future
  • C
    Day to Day working of business
    Correct
  • D
    Purchase of fixed assets
6
Shareholders funds refer to ________________
  • A
    Share capital
  • B
    All of these
    Correct
  • C
    Surpluses and Retained Earnings
  • D
    Reserves
7
Borrowed funds refer to the ___________________
  • A
    Debentures
  • B
    All of these
    Correct
  • C
    Long term loans
  • D
    Public Deposits
8
Which of the following will affect the financing decisions?
  • A
    Cash flow position
  • B
    All of these
    Correct
  • C
    Cost and Risk
  • D
    Floatation costs
9
Portion of profit after tax, which is distributed to shareholders is a___
  • A
    Investment Decision
  • B
    Dividend Decision
    Correct
  • C
    Financing Decision
  • D
    None of these
10
Which of the following affects the Dividend Decision of a company?
  • A
    Cash Flow Position
  • B
    Taxation Policy
  • C
    Earnings
  • D
    All of these
    Correct
11
__________ means estimating the funds requirement of a business and determining the sources of funds for current and fixed assets and future expansion prospects.
  • A
    Capital Structure
  • B
    Dividend Decisions
  • C
    Working Capital
  • D
    Financial Planning
    Correct
12
The main objective of financial planning is to ensure that_________
  • A
    Purchase of fixed assets
  • B
    Enough funds are available at the right time
    Correct
  • C
    Dividend is paid to shareholders on the right time
  • D
    Purchase of raw material
13
Cost of advertising and printing prospectus is called__________
  • A
    Dividend cost
  • B
    Equity cost
  • C
    Debt cost
  • D
    Floatation cost
    Correct
14
_______ refers to the increase in profit earned by the equity shareholders due to the presence of fixed financial charges like interest.
  • A
    Interest
  • B
    Retained Earnings
  • C
    Dividend
  • D
    Trading on equity
    Correct
15
Favourable financial leverage is a situation where _____
  • A
    ROI is Equal to the Rate of interest on debt
  • B
    None of these
  • C
    ROI is higher than the rate of interest on debt
    Correct
  • D
    ROI is lower than the rate of interest on debt