Correct Answer: Setting objectives and goals
  

Solution : The correct answer is (a). Setting objectives and goals.

Setting objectives and goals is a crucial initial step in any expansion strategy as it helps define the direction and purpose of the expansion. By clearly outlining what the company aims to achieve, ABC Retail Chain can provide a framework for the entire planning process. This involves determining specific, measurable, achievable, relevant, and time-bound (SMART) objectives that align with the overall vision and mission of the company.

While identifying potential risks, allocating resources, and evaluating alternatives are all essential components of the expansion planning process, they are typically undertaken after establishing objectives and goals. Objectives set the foundation for subsequent steps, allowing the company to make informed decisions and prioritize activities based on the desired outcomes.

Correct Answer: Both assertion and reason are correct, and the reason explains the assertion.
 

Solution : The correct answer is (a) Both assertion and reason are correct, and the reason explains the assertion.

The assertion that "Planning is a forward-looking function of management" is correct. Planning involves looking into the future, setting objectives, and determining the best course of action to achieve those objectives. It's about preparing for what lies ahead.

The reason provided is also correct. Planning, as a management function, does involve setting objectives and determining the most appropriate strategies and actions to achieve those objectives. This is a fundamental aspect of planning.

Correct Answer: To fund new business ventures

Solution : The correct answer is (d) To fund new business ventures

Diversification often involves venturing into new business areas, launching new products or services, or entering different markets. These expansions require capital for research and development, marketing, hiring additional staff, acquiring assets, covering operational expenses, and other investment needs. External financing, such as loans or equity investment, provides the necessary funds to support these diversification initiatives and facilitate the successful expansion of the business into new ventures. Options a, b, and c are not relevant to the need for external financing in the context of diversification.

Correct Answer: Corporate bonds

Solution : The correct answer is (d) Corporate bonds.

Corporate bonds are debt securities issued by corporations to raise capital. They have a fixed interest rate and a specific maturity period, making them the most suitable choice based on the information provided in the question. Corporate bonds pay regular interest to bondholders until maturity when the principal amount is repaid.

Correct Answer: Statement 1 is true, and statement 2 is false.
    

Solution : The correct answer is (a) Statement 1 is true, and statement 2 is false.

Statement 1 is true. Financial planning is crucial for optimizing the allocation of funds across various activities within a business. It involves analyzing financial resources and determining the best allocation to achieve the organization's goals and objectives efficiently.

Statement 2 is false. Financial planning does not focus only on the allocation of funds to marketing activities. Financial planning is a comprehensive process that considers allocation of funds across all areas of a business, including operations, marketing, research and development, expansion, debt repayment, investments, and more. It aims to optimize the allocation of funds across all relevant aspects of the business.

Correct Answer: Both assertion and reason are true, and the reason is the correct explanation of the assertion.
    

Solution : The correct answer is (a) Both assertion and reason are true, and the reason is the correct explanation of the assertion.

Financial planning is the process of creating a roadmap for how a business will use its financial resources to achieve its goals. One of the most common goals of financial planning is to maximize shareholder wealth and company value. This can be achieved by making sound financial decisions, such as investing in profitable projects, expanding into new markets, and acquiring other companies.

While financial planning may consider the interests of other stakeholders, such as employees, customers, and suppliers, the primary goal is to maximize shareholder wealth and company value. This is because shareholders are the owners of the company, and they have a right to expect that their investment will be profitable.

Overall, financial planning is an essential tool for businesses that want to maximize shareholder wealth and company value. By making sound financial decisions, businesses can invest in new opportunities, grow their businesses, and increase their profitability.

Correct Answer: Planning Commission of India

Solution : The correct answer is (c) Planning Commission of India.

The estimation of the poverty line in India has historically been the responsibility of the Planning Commission of India, which was a government body responsible for formulating and assessing the country's Five-Year Plans. The Planning Commission, now replaced by NITI Aayog, has used various methods and criteria to determine the poverty line in India.

It is important to note that the specific methodology for estimating the poverty line in India has undergone revisions and updates over time. Different committees and experts have been involved in reviewing and recommending changes to the methodology. However, the Planning Commission (now NITI Aayog) has been the primary institution responsible for estimating the poverty line in India.

Correct Answer: Both assertion and reason are true, and the reason is the correct explanation of the assertion.
  

Solution : The correct answer is (a) Both assertion and reason are true, and the reason is the correct explanation of the assertion.

The assertion is true. Financial planning is indeed necessary for achieving business objectives effectively. Financial planning involves setting goals, assessing the financial resources required to achieve those goals, and creating a strategy to allocate and manage those resources effectively to meet the business objectives.

The reason is the correct explanation. Financial planning helps allocate funds optimally and avoids wastage. By planning and managing finances effectively, a business can ensure that funds are allocated where they are needed most, avoiding unnecessary expenditures and optimizing resource utilization. This, in turn, helps the business achieve its objectives in a cost-effective and efficient manner.

Correct Answer: Achieving long-term financial goals and stability

Solution : The correct answer is (c) Achieving long-term financial goals and stability

Financial planning in a business involves creating a comprehensive strategy to manage financial resources efficiently, allocate funds effectively, and achieve both short-term and long-term financial objectives. It's about ensuring the company's stability and growth over time, managing risks, optimizing resource utilization, and making informed decisions to achieve sustainable success in the long run. The goal is to achieve financial stability and meet the company's long-term goals and objectives, rather than focusing solely on short-term operational needs or maximizing profits at any cost.

Correct Answer: Achieving long-term innovation goals

Solution : The correct answer is (c) Achieving long-term innovation goals

Financial planning in the context of innovation and research involves strategic allocation of financial resources to support long-term innovation goals. This includes funding research projects, developing new products, exploring new technologies, and investing in activities that will position the company for future growth and competitiveness. The focus is on achieving sustained innovation and long-term success rather than short-term profit maximization, minimizing production costs, or meeting immediate operational expenses, although these factors are also considered within the broader financial planning strategy.