Planning
Question : Case Study: XYZ Ltd. - Raising Finance for Expansion
XYZ Ltd. is a growing company that manufactures electronic gadgets. The company has been successful in the market and is planning to expand its operations. To finance this expansion, XYZ Ltd. is considering various sources of business finance.
Questions : Different Sources of Business Finance
XYZ Ltd. is considering borrowing funds by issuing long-term debt securities. What are these securities called?
Option 1: Equity shares
Option 2: Preference shares
Option 3: Debentures
Option 4: ADRs
Correct Answer: Debentures
Solution : The correct answer is (c) Debentures
Debentures are long-term debt instruments issued by companies to raise funds from the public or institutional investors. Holders of debentures are creditors of the company and are promised a fixed rate of interest and repayment of the principal amount
Question : Case Study 3:
MNO Inc. is a well-known conglomerate that is planning to diversify its business operations by acquiring other companies.
Question :
To finance its acquisition plans, MNO Inc. is considering issuing bonds. What type of market activity does this represent?
Option 1: Primary market
Option 2: Secondary market
Option 3: Money market
Option 4: Capital market
Correct Answer: Primary market
Solution : The correct answer is (a) Primary market
If MNO Inc. is considering issuing bonds to finance its acquisition plans, it represents a primary market activity. The primary market is where new securities, such as bonds and stocks, are issued for the first time and
Question : Assertion-Reason Questions: Chapter - Sources of Business Finance
Questions : Business Finance and Its Meaning
Assertion: Financial planning plays a critical role in optimizing the allocation of funds and resources.
Reason: Financial planning focuses solely on allocating funds to marketing activities.
Option 1: Both assertion and reason are true, and the reason is the correct explanation of the assertion.
Option 2: Both assertion and reason are true, but the reason is not the correct explanation of the assertion.
Option 3: Assertion is true, but the reason is false.
Option 4: Both assertion and reason are false.
Correct Answer: Assertion is true, but the reason is false.
Solution : The correct answer is (c) Assertion is true, but the reason is false.
The assertion is true. Financial planning involves efficiently allocating funds and resources to various activities within a business, aiming to achieve the company's financial goals
Question : Case Study 80
LMN Corporation is a well-established company planning to raise funds for its expansion projects. The company's management is considering the regulatory functions of SEBI.
What is the primary regulatory role of SEBI?
Option 1: Allocating resources to companies
Option 2: Facilitating trading on stock exchanges
Option 3: Protecting the rights of investors
Option 4: Providing loans to companies
Correct Answer: Protecting the rights of investors
Solution : The correct answer is (c) Protecting the rights of investors
The primary regulatory role of the Securities and Exchange Board of India (SEBI) is to protect the rights of investors. SEBI is the regulatory body for the securities market in India.
Question : Which of the following statement is correct? Statement 1- Manpower planning belongs to staffing function of management. Statement 2- Division of activities and creation of organisational structure belongs to organising function of management.
Option 1: Both are true
Option 2: Both are false
Option 3: Statement 1 is true and statement 2 is false.
Option 4: Statement 2 is true and statement 1 is false.
Correct Answer: Both are true
Solution : Manpower planning belongs to staffing function of management. Division of activities and creation of organisational structure belongs to organising function of management. Hence option A is correct .
Question : Case Study 16:
GHI Ltd. is a leading company in the telecommunications sector planning to expand its international operations.
GHI Ltd. is looking to raise funds for expanding its international operations. Which type of financial instrument might it use?
Option 1: Commercial paper
Option 2: Equity share
Option 3: Debenture
Option 4: Treasury bill
Correct Answer: Equity share
Solution : The correct answer is (b) Equity share.
Equity shares are a type of security that represents ownership in a company. When a company sells equity shares, it is raising funds by selling a piece of itself to investors. Equity shares are a good way
Question : Case Study: PQR Enterprises - Funding Strategies for Diversification
PQR Enterprises is a well-established conglomerate planning to diversify its business operations. The company is evaluating various sources of business finance to support its diversification plans.
Questions : Different Sources of Finance
How can PQR Enterprises use retained earnings as a source of finance for its diversification?
Option 1: By selling company assets
Option 2: By raising funds through IPOs
Option 3: By utilizing accumulated profits
Option 4: By issuing preference shares
Correct Answer: By utilizing accumulated profits
Solution : The correct answer is (c) By utilizing accumulated profits
Retained earnings are the portion of net profits that a company keeps and reinvests in the business rather than distributing them as dividends to shareholders. PQR Enterprises can utilize these accumulated profits or
Question : Which of the following is not an objective of the National Rehabilitation and Resettlement Policy (2007) of the government of India?
Option 1: To maximise the focus on rehabilitation without really caring about resettlement
Option 2: To integrate rehabilitation concerns into the development planning and implementation process
Option 3: To minimise displacement and to promote, as far as possible, not-displacing or taut-displacing alternatives
Option 4: To provide a better standard of living, making concerted efforts to provide sustainable income to the affected families
Correct Answer: To maximise the focus on rehabilitation without really caring about resettlement
Solution : The correct answer is to maximise the focus on rehabilitation without really caring about resettlement.
The National Rehabilitation and Resettlement Policy, 2007 provides for compensation to people whose land is acquired or any other
Question : The Planning Commission of India was established in the year
Option 1: 1947
Option 2: 1949
Option 3: 1950
Option 4: 1952
Correct Answer: 1950
Solution : The Correct Answer is- 1950
The Planning Commission was a department of the Indian government responsible for creating five-year plans as well as performing a variety of other duties. The first chairman of the Planning Commission was Jawaharlal Nehru. It was founded in 1950 to
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