Q. Financial planning is concerned with
✅ Correct Answer: (D)
Laying down of policies in regard to cash control, etc.
Functional Areas of Business MCQs and Notes
Q. A good financial structure should be
✅ Correct Answer: (A)
Flexible enough to have scope for expansion or contraction
Q. Trading on equity means
✅ Correct Answer: (A)
Taking advantage of equity share capital to borrow funds on reasonable basis
Q. Which of the following is not short-term source of capital/finance?
✅ Correct Answer: (C)
Debenture
Q. “_______________ of a company refers to the make-up of its capitalization and it includes all long-term capital resources viz., loans, reserves, shares and bonds. - Gerstenberg.
✅ Correct Answer: (D)
Capital structure
Q. A theory known as dividend irrelevance theory is:
✅ Correct Answer: (C)
Modigliani & Miller’s Model
Q. Projects are accepted under profitability method, if
✅ Correct Answer: (A)
PI > 1
Q. ________ varies with the volume of operations
✅ Correct Answer: (B)
Fluctuating/Temporary WC
Q. A firm should select a financing mix which maximizes its value and the shareholders’ wealth. Such is referred to as
✅ Correct Answer: (D)
Optimal Capital structure
Q. The modern approach to finance functions considers which of the following?
✅ Correct Answer: (D)
All of the above