CBSE  /  Class 12  /  Business Studies  /  Financial Management

  • 1. 
    ___ involves increasing the proportion of debt and preference shares in total capital.

  • Trading on equity
  • Capital Budgeting
  • Financing decision
  • Financial Analysis

  • 2. 
    ___ is the time span between acquisition of goods and realisation of sale proceeds.

  • Working capital
  • Payback Period
  • Operating Cycle
  • Account Receivables Period

  • 3. 
    ___ Gross working capital represents the total investment in assets.

  • Current
  • Fixed
  • Tangible
  • Intangible

  • 4. 
    ___ capital refers to investment in long-term assets.

  • Fixed
  • Variable
  • Working
  • Both (b) and (c)

  • 5. 
    The working capital requirement of a business is not likely to be high when?

  • The nature of business is trading
  • Scale of operation of business is small
  • It is difficult to procure raw material
  • The rate of inflation is low

  • 6. 
    Under which of the following circumstances the fixed capital requirement of a business is not likely to be high?

  • When the raw material is not easily available
  • Capital intensive techniques of production are used
  • The growth prospects of a company a high
  • When the financial alternatives are easily available

  • 7. 
    Which of the following statements is not true with regard to use of fixed capital?

  • It affects the long term growth of the business.
  • Large amount of funds are involved.
  • The business risk involved is low.
  • The investment decisions are irreversible.

  • 8. 
    Under which of the following situations a company is not likely to issue equity capital?

  • When the debt service coverage ratio is high.
  • When the interest coverage ratio is high.
  • When the cost of debt capital is low.
  • All of the above

  • 9. 
    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

  • More than 16 %
  • Less than 16 %
  • Equal to 16%
  • None of the above

  • 10. 
    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

  • 20%
  • 40%
  • 10%
  • 80%
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