Planning
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
What is the primary characteristic of equity shares?
Option 1: Fixed interest payments
Option 2: Ownership in the company
Option 3: Guaranteed redemption
Option 4: No voting rights
Correct Answer: Ownership in the company
Solution : The correct answer is (b) Ownership in the company
Equity shares represent ownership or equity ownership in a company. Shareholders who hold equity shares have ownership rights in the company, which typically includes voting rights, the right to share in the company's
Questions : Equity Shares and Preference Shares
What is the main advantage of equity shares for PQR Enterprises?
Option 1: Fixed dividend payments
Option 2: No dilution of ownership
Option 3: Higher interest payments
Option 4: Guaranteed redemption
Correct Answer: No dilution of ownership
Solution : The correct answer is (b) No dilution of ownership
Equity shares provide a way for PQR Enterprises to raise capital without incurring debt or having to make fixed payments, thus avoiding the obligation of repayment associated with loans or debentures. Additionally, issuing
Question : Questions : Business Finance and Its Meaning
Statement 1: Financial planning plays a critical role in optimizing the allocation of funds.
Statement 2: Financial planning focuses only on allocation of funds to marketing activities.
Option 1: Statement 1 is true, and statement 2 is false.
Option 2: Statement 1 is false, and statement 2 is true.
Option 3: Both statements 1 and 2 are true.
Option 4: Both statements 1 and 2 are false.
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
Questions : Debentures and Financial Instruments
PQR Enterprises is considering issuing IDR. What purpose does an IDR serve?
Option 1: It raises funds in the domestic market
Option 2: It allows foreign companies to invest in India
Option 3: It enables Indian companies to raise funds abroad
Option 4: It ensures dividend payments to preference shareholders
Correct Answer: It enables Indian companies to raise funds abroad
Solution : The correct answer is (c) It enables Indian companies to raise funds abroad
IDR stands for Indian Depository Receipts. An IDR is a financial instrument denominated in Indian Rupees and issued by a domestic depository in India. It
Question : Assertion: Planning is the most fundamental function of management.
Reason: It lays the foundation for all other management functions and helps in achieving objectives.
Option 1: Both assertion and reason are correct, and the reason explains the assertion.
Option 2: Both assertion and reason are incorrect.
Option 3: The assertion is correct, but the reason is incorrect.
Option 4: The assertion is incorrect, but the reason is correct.
Option 5: Both assertion and reason are correct, and the reason is not the correct explanation of the assertion.
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.
Planning is indeed considered the most fundamental function of management. The reason provided is also correct because
Question : Microsoft Excel is a
Option 1: Graphics Package
Option 2: MS Office Package
Option 3: Financial Planning Package
Option 4: Electronic Spreadsheet
Correct Answer: Electronic Spreadsheet
Solution : The correct option is Electronic Spreadsheet.
Excel is a spreadsheet program from Microsoft. It's a computer program that lets you organise, analyse, and visualise data in a tabular style. Excel spreadsheets comprise rows and columns, with each cell containing data such as text, numbers,
Question : Case Study 84
DEF Ltd. is a well-established company planning to raise funds for its expansion projects. The company's management is considering the selection of a broker.
Question :
What type of broker provides trading services at a lower cost but offers limited advice?
Option 1: Full-service broker
Option 2: Discount broker
Option 3: Floor broker
Option 4: Specialist broker
Correct Answer: Discount broker
Solution : The correct answer is (b) Discount broker
A discount broker is a type of broker that provides trading services at a lower cost but offers limited advice compared to a full-service broker. Discount brokers typically charge lower commissions or fees for executing trades but
Question : Statement 1: Pakistan has a higher rate of population growth compared to India and China.
Statement 2: Factors such as high fertility rates and inadequate family planning contribute to Pakistan's higher population growth rate.
Option 1: Both statements are true.
Option 2: Both statements are false.
Option 3: Statement 1 is true, Statement 2 is false.
Option 4: Statement 2 is true, Statement 1 is false.
Correct Answer: Both statements are true.
Solution : The correct answer is (a) Both statements are true.
Pakistan has a higher rate of population growth compared to India and China. This can be attributed to various factors, including high fertility rates and inadequate family planning measures. The lack of effective
Question : Case Study 2:
XYZ Ltd. is a well-established pharmaceutical company that is planning to diversify its product range. The HR department is faced with the challenge of sourcing and training employees for the new divisions. Evaluate the following scenarios and choose the correct option:
Question:
XYZ Ltd. decides to hire employees who are already familiar with the company's operations and culture. Which source of recruitment should they focus on?
Option 1: Employee referrals
Option 2: External sources
Option 3: Internal sources
Option 4: Job portals
Correct Answer: Internal sources
Solution : The correct answer is (c) Internal sources
If XYZ Ltd. decides to hire employees who are already familiar with the company's operations and culture, they should focus on internal sources of recruitment. This could involve promoting or transferring existing employees to fill the new
Question : Case Study 22:
DEF Ltd. is a well-established company planning to expand its global operations through acquisitions.
To finance its acquisition plans, DEF Ltd. is evaluating short-term financing options. Which money market instrument might it use?
Option 1: Commercial paper
Option 2: Call money
Option 3: Treasury bill
Option 4: Corporate bond
Correct Answer: Commercial paper
Solution : The correct answer is (a) Commercial paper
Commercial paper is a short-term unsecured promissory note issued by corporations to raise funds quickly. It is a common choice for businesses looking for short-term financing to support various operational needs, including acquisitions. It provides a quick
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