Financial Management-Financial Decisions [CBSE (Central Board of Secondary Education) Class-12 Business-Studies]: Questions 1 - 7 of 9
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Question 1
Describe in Detail Subjective▾
The directors of a company have decided to expand their business activities by increasing the stock of raw materials and finished goods at an estimated cost of ₹ 50 lakhs, Describe the various ways open to the company to raise necessary finance for the purpose.
EditExplanation
The company can raise necessary finance for the purpose of expansion through the following functio…
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Question 2
Describe in Detail Subjective▾
Every manager has to take three major decisions while performing the finance function. Explain them.
EditExplanation
A manager take three following major decisions:-
- Divid…
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Question 3
Write in Short Short Answer▾
A capital budgeting decision is capable of changing the financial fortune of a business. Do you agree? Why or why not?
EditQuestion 4
Describe in Detail Subjective▾
Are the share holders of a company likely to gain with a debt component in the capital employed? Explain with the help of an example?
EditExplanation
The shareholders of a company are very likely to gain with debt component in the capital employed by way of trading on equity as it increases the earning per share (EPS) of the shareholders.
Trade on equity:
- Trading on equity occurs when a corporation uses bonds, other debt, and preferred stock to increase its earnings on common stock.
- For example, a …
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Question 5
Write in Brief One Liner▾
“A decision to acquire a new and modern plant to upgrade an old one” . Identify the aspect of financial decision.
EditQuestion 6
Write in Short Short Answer▾
Every manager has to take three major decisions while performing the finance function. Explain them.
EditQuestion 7
Appeared in Year: 2010
Describe in Detail Subjective▾
What is meant by financing decision? State any four factors affecting the financing decision.
EditExplanation
Financing decision identify source of funds. Two main funds (1) shareholders՚ funds and (2) borrowed funds.
Its factors are given below:-
(1) Risk involved:- All sources of funds are associated with degree of risk. Risk of payment that must be analyzed before debt. Sources of funds that include risk should be analyzed.
(2) Flotation cost:- Cost includ…
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