Financial Management - Class 12 Business Studies - Chapter 9 - Notes, NCERT Solutions & Extra Questions
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Extra Questions - Financial Management | NCERT | Business Studies | Class 12
____________ is the process of estimating the financial requirements of an organization, specifying the sources of funds, and ensuring that enough funds are available at the right time.
A. Financial Decision
B. Financial Planning
C. Investment Decision
D. Dividend Decision
The correct option is B. Financial Planning
Financial Planning is the process of estimating an organization's financial requirements, specifying the sources of funds, and ensuring that sufficient funds are available at the appropriate times.
Which is a better investment: a stock of $6%$ for rupees 108 or a stock of $4%$ at rupees 90?
To determine which investment is better, we calculate the return as a percentage of the investment cost for each stock.
Stock of $6%$ when purchased for Rupees 108: The income for every Rs. 108 invested is Rs. 6. To find the percentage return: $$ \left(\frac{6}{108}\right) \times 100 = 5.56% $$
Stock of $4%$ when purchased for Rupees 90: The income for every Rs. 90 invested is Rs. 4. To calculate the percentage return: $$ \left(\frac{4}{90}\right) \times 100 = 4.44% $$
Conclusively, the investment in the stock with a $6%$ return at Rs. 108 is a better choice because it provides a higher percentage return (5.56%) compared to the $4%$ stock at Rs. 90, which yields only 4.44%.
Keeping the cash idle in the business results in:
A. financial loss B. opportunity lost C. balance lost D. comparative loss
The correct answer is B. opportunity lost.
Keeping cash idle in a business leads to an opportunity lost because that money could have been invested elsewhere, potentially yielding a better return. This concept emphasizes the significance of effective cash management to avoid missing out on profitable investment opportunities.
Consider the following statements with respect to National Skill Development Corporation (NSDC):
It is a not-for-profit company.
It was set up by the Ministry of Finance.
The Government of India holds 75% of the share capital of NSDC and the private sector holds the remaining 25%. Which of the above statement(s) is/are correct?
Only 1
Only 1 and 2
All of the above
None of the above
Correct Answer: B. Only 1 and 2
The National Skill Development Corporation (NSDC) is a not-for-profit public limited company, established under section 25 of the Companies Act, 1956 (which corresponds to section 8 of the Companies Act, 2013). It was incorporated on July 31, 2008. The NSDC operates as a Public Private Partnership (PPP) model, and it was set up by the Ministry of Finance.
NSDC functions under the guardianship of the Ministry of Skill Development & Entrepreneurship. Contrary to the statement given in option three, the Government of India through the Ministry holds 49% of the share capital in NSDC, while the private sector holds the larger share of 51%.
Thus, statement 1 and 2 are correct, indicating that answer B (Only 1 and 2) is accurate, making statements 1 and 2 correct while statement 3 is incorrect.
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