Updated on July 15, 2022, 8:16 AM
by Tiwari Academy
Class 12 Business Studies Chapter 9 MCQ and Important Questions of Financial Management updated for CBSE and State board session 2024-25. Class 12 Business Studies Chapter 9 multiple choice questions and extra questions helps the students in exams to clear the doubts. Class 12 Business Studies Chapter 9 Solutions.
Class 12 Business Studies Chapter 9 MCQ
Q1
The main objective of financial management is
[A]. Maximising profit
[B]. Minimising losses
[C]. Maximisation of shareholders’ wealth
[D]. None of the Above
Answer: Option C
Explanation:
Maximizing profits cannot be the aim of FM because profits can be maximized using dubious means.
Current assets are supposed to be converted into cash within a period of
[A]. 7 days
[B]. 1 month
[C]. Quarter of an year
[D]. One Year
Answer: Option D
Explanation:
The general definition of current assets makes it clear that current assets have a feature of converting assets into cash within one year. Attention is invited to amendments in Companies Act, 2013. Where there are amendments to this definition.
1. To ensure availability of adequate funds at right time.
2. It serves as the basis of financial control. The management attempts to ensure utilization of funds in tune with the financial plans.
3. It attempts to achieve a balance between inflow and outflow of funds. Adequate
liquidity is ensured throughout the year.
4. It results in preparation of plans for future. Thus new projects can be under
taken smoothly.
5. It provides policies and procedures for the sound administration of finance
function.
6. To see that the firm does not raise funds unnecessarily.
Factors affecting Investment Decisions
Cash flows of the project
Rate of Return
Investment Criteria Involved
Q13
Cost and risk are the factors affecting ……….. decision.
[A]. Capital budgeting
[B]. Financing
[C]. Investing
[D]. Dividend
Answer: Option B
Explanation:
Before taking a loan, any entity should carefully evaluate the cost of capital and the risk associated with it.
In this topic, financial management, what is important– MCQs or lengthy topics carrying 4-6 marks are important?
The topic financial management (chapter 9 class 12th business studies) is, by far, the most difficult and lengthy topic of class 12 business studies. The questions relating to capital structure, fixed capital, working capital and dividend decision are having 10-12 points each. It also means there is scope for MCQs in this topic.
Is there a possibility of having a picture-based MCQs?
In the board examination, nothing can be ruled out. There may be a question or two of such types.
Generally, how many options are given for answering MCQs?
Usually four option are given. However, 3-5 options could also be given in some examination.