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Class 12 Business Studies
Controlling
Quiz 2
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Which one of the following is related to planning, organising, directing and controlling of financial activities?
0%
Financial decision
0%
Capital structure
0%
Investment decision
0%
Financial management
Explanation
Financial management
Wealth maximisation depends on
0%
market price per share.
0%
market price of finished good.
0%
market price of inventory.
0%
market price of fixed assets.
Explanation
market price per share.
Investment decision involves
0%
investment in fixed assets.
0%
investment in current assets.
0%
investment in fixed and current assets.
0%
investment in Government securities.
Explanation
investment in fixed and current assets.
If dividend portion of total earnings is high, portion of retained earnings will be
0%
high.
0%
low.
0%
moderate.
0%
equal.
Explanation
low.
Financial procedures are determined by
0%
financial planning.
0%
financial leverage.
0%
financial decisions.
0%
capital structure.
Explanation
financial planning.
Capital structure shows
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Debtor-creditor ratio.
0%
Fixed assets-current assets ratio.
0%
Debt-equity ratio.
0%
Interest coverage ratio.
Explanation
Debt-equity ratio.
Fixed capital requirements are determined by
0%
nature of business.
0%
nature of business environment.
0%
nature of Government control.
0%
nature of marketing efforts.
Explanation
nature of business.
Working capital requirements are low when an organisation has
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high technology.
0%
high debtors.
0%
high inventory.
0%
high creditors.
Explanation
high creditors.
___ is concerned with optimum procurement as well as usage of finance.
0%
Financial Analysis
0%
Financial Planning
0%
Financial Management
0%
Budgeting
Explanation
Financial Management
___ represents investment in current assets required for day-to-day operations of the business.
0%
Long-term capital
0%
Working capital
0%
Capital Budgeting
0%
Medium-term capital
Explanation
Working capital
___ involves increasing the proportion of debt and preference shares in total capital.
0%
Trading on equity
0%
Capital Budgeting
0%
Financing decision
0%
Financial Analysis
Explanation
Trading on equity
___ is the time span between acquisition of goods and realisation of sale proceeds.
0%
Working capital
0%
Payback Period
0%
Operating Cycle
0%
Account Receivables Period
Explanation
Operating Cycle
___ Gross working capital represents the total investment in assets.
0%
Current
0%
Fixed
0%
Tangible
0%
Intangible
Explanation
Current
___ capital refers to investment in long-term assets.
0%
Fixed
0%
Variable
0%
Working
0%
Both (b) and (c)
Explanation
Working
The working capital requirement of a business is not likely to be high when?
0%
The nature of business is trading
0%
Scale of operation of business is small
0%
It is difficult to procure raw material
0%
The rate of inflation is low
Explanation
It is difficult to procure raw material
Under which of the following circumstances the fixed capital requirement of a business is not likely to be high?
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When the raw material is not easily available
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Capital intensive techniques of production are used
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The growth prospects of a company a high
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When the financial alternatives are easily available
Explanation
When the financial alternatives are easily available
Which of the following statements is not true with regard to use of fixed capital?
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It affects the long term growth of the business.
0%
Large amount of funds are involved.
0%
The business risk involved is low.
0%
The investment decisions are irreversible.
Explanation
The business risk involved is low.
Under which of the following situations a company is not likely to issue equity capital?
0%
When the debt service coverage ratio is high.
0%
When the interest coverage ratio is high.
0%
When the cost of debt capital is low.
0%
All of the above
Explanation
All of the above
If the rate of return on investment for a company is 16%, a situation of unfavourable financial leverage will be said to arise when the rate of interest payable on debt capital is
0%
More than 16 %
0%
Less than 16 %
0%
Equal to 16%
0%
None of the above
Explanation
More than 16 %
The total capital of Uranium Private Limited is ?50 lacs. The amount of debt is ?20 lacs. The company has earned a profit of ^10 lacs during the current financial year. Its return on investment (ROI) for the present year is
0%
20%
0%
40%
0%
10%
0%
80%
Explanation
20%
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