NCERT Class 12 Chapter 9 Business Studies Financial Management MCQ

NCERT Class 12 Chapter 9 Business Studies Financial Management MCQ | Questions & Answers: Students of NCERT Class 12 should check this article to get access to the NCERT Class 12 Chapter 9 Business Studies Financial Management MCQ Quiz. In this article, we have provided Online Multiple Choice Questions that will help you guys in learning new concepts.

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1. The Cheapest source of finance is:

A. Debenture

B. Equity share capital

C. Preference share

D. Retained earnings

2. Which of the following statements is not true with regard to the concept of product?

A. It is a bundle of utility.

B. It is a source of satisfaction

C. It is confined to physical product

D. All of the above

3. Business finance is needed to

A. Establish a business

B. Run a business

C. Expand a business

D. All of the above

4. A decision to acquire a new and modern plant to upgrade an old one is a

A. Financing decision

B. Working capital decision

C. Investment decision

D. None of the above

5. In order to promote the sales of the company, Mukund Limited has decided to offer consumer durable products at 0% finance. Identify the type of marketing factor being described in the above line.

A. Controllable factor

B. Non-controllable factor

C. Environmental factor

D. None of the above

6. Which of the following is not a tangible asset?

A. Machinery

B. Trademarks

C. Factories

D. Offices

7. Other things remaining the same, an increase in the tax rate on corporate profit will

A. Make the debt relatively cheaper

B. Make the debt relatively the dearer

C. Have no impact on the cost of debt

D. We can’t say

8. Financial Management aims at

A. Reducing the cost of funds procured

B. Keeping the risk under control

C. Achieving effective deployment of such funds

D. All of the above

9. Companies with a higher growth potential are likely to

A. Pay lower dividends

B. Pay higher Dividends

C. Dividends are not affected

D. None of the above

10. Guneet went to a shop and expressed her desire to buy a copper water bottle only of Prestige company. Identify the component related to branding being described in the above case.

A. Trademark

B. Generic name

C. Brand name

D. Brand mark

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11. Primary aim of financial management is to

A. Maximise shareholder’s wealth

B. Wealth maximisation concept

C. Maximisation of the market value of equity shares

D. All of the above

12. Financial leverage is called favourable if:

A. Return on investment is lower than the cost of debt.

B. ROI is higher than the cost of Debt

C. Debt is easily available

D. If the degree of existing financial leverage is low

13. The term ‘market’ may be understood in which of the following contexts?

A. Geographical area covered

B. Type of buyers

C. Quantity of goods transacted

D. All of the above

14. This decision relates to how the firm’s funds are invested in different assets,

A. Investment decision

B. Financing decision

C. Dividend decision

D. None of the above

15. Higher debt – equity ratio results in:

A. Lower financial risk

B. Higher degree of operating risk

C. Higher degree of financial risk

D. Higher EPS.

16. According to the modem marketing concept, which of the following statements is true?

A. It refers to the group of people who do not have the ability but willingness to buy a particular product

B. It refers to only the set of people who have the purchasing power to buy a particular product

C. It refers to the set of actual and potential buyers for a product.

D. It refers only to the people who show interest in a particular product.

17. Purchasing a new machine to replace an existing one is an example of

A. Financing decision

B. Dividend decision

C. Working capital decision

D. Capital budgeting decision

18. Higher Working capital usually results in:

A. Higher current ratio, higher risk and higher profits

B. Lower current ratio, higher risk and profits

C. Higher equity, lower risk and lower profits

D. Lower equity, lower risk and higher profits.

19. Which of the following is a feature of marketing process?

A. Satisfying needs and wants of the consumers

B. Creating a market offering

C. Developing an exchange mechanism

D. All of the above

20. The size of assets, the profitability and competitiveness are all affected by

A. Working capital decision

B. Capital budgeting decision

C. Financing decision

D. Dividend decision

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21. Current assets are those assets which get converted into cash:

A. Within six months

B. Within one year

C. Between one year and three years

D. Between three and five years.

22. Which of the following statements does not reflect a condition to be satisfied for an exchange to take place?

A. Involvement of at least two parties- the buyer and the seller- is mandatory.

B. Each party should be capable of offering something of value to the other.

C. Exchange can take place if the buyers and sellers are not able to communicate with each other.

D. Each party should have freedom to accept or reject other party’s offer.

23. These decisions affect the liquidity as well as profitability of a business.

A. Capital budgeting decision

B. Financing decision

C. Working capital decision

D. Dividend decision

24. A fixed asset should be financed through:

A. A Long-term liability

B. A Short-term liability

C. A Medium-term liability

D. A Mix of long- and short-term liabilities

25. Which of the following can be marketed?

A. Red Cross society persuading to donate blood

B. Kerala Tourism persuading people to visit Kerala for health tourism.

C. Political parties persuading to vote for a particular candidate.

D. All of the above