Question : Questions : Business Finance and Its Meaning
Statement 1: Financial planning is crucial for effective utilization of financial resources.
Statement 2: Financial planning only considers short-term objectives.
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 involves creating a strategy to manage, allocate, and utilize financial resources effectively to achieve short-term and long-term financial goals. It encompasses budgeting, investing, saving, insurance planning, tax planning, and more to ensure efficient financial management.
Statement 2 is false. Financial planning considers both short-term and long-term objectives. It involves setting financial goals for the short, medium, and long term, and creating a comprehensive plan to achieve these goals through appropriate financial strategies and actions.
Statement 1: Financial planning plays a pivotal role in effective resource allocation.
Statement 2: Financial planning primarily focuses on production activities.
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