Chapter Exam

Chapter 9: Financial Management — Online MCQ Test

Q: Which of the following is a decision area of financial management?

Answer: C. Investment decision — Investment decision is one of the key decisions in financial management. It relates to the allocation of funds to different assets or projects.

Q: A company wants to decide whether to buy a new machine or expand an existing plant. This is an example of:

Answer: C. Investment decision — Choosing between different long-term assets is an investment decision. It involves selecting the most profitable use of funds.

Q: Which of the following is the most appropriate order of financial management decisions in a business?

Answer: C. Investment, financing, dividend — First, funds are invested in assets and projects; then financing is arranged; finally, dividend decisions are taken from the profits earned. This reflects the main financial decision areas in the chapter.

BUSINESS STUDIES · Grade 12 · CBSE(NCERT)

Practice Chapter 9: Financial Management with a free chapter-wise online MCQ test for CBSE(NCERT) Grade 12 BUSINESS STUDIES. This chapter covers: Focusing on corporate finance this chapter details financial decisions investment financing dividend capital structure factors working capital requirements and fixed capital manage.... AI-generated questions from basic to board-exam level, with instant results and explanations.

Questions

20m

Time Limit

Attempts Left

10 random questions from this chapter (mixed difficulty)
Questions you've seen before won't repeat until the pool resets
You have 20 minutes — exam auto-submits when time is up
Maximum 3 attempts per chapter
Results and explanations shown immediately after submission

New here? Register free — includes 3 free chapter exams.

Chapter 9: Financial Management — Important Questions & Answers (FAQ)

Frequently asked questions from CBSE(NCERT) Grade 12 BUSINESS STUDIES — Chapter 9: Financial Management, with answers and explanations. These are sample questions; the exam has its own separate question set.

What is financial management?

A. Managing only cash receipts and payments
B. Planning, organizing, directing and controlling the financial activities of a business ✓
C. Preparing only the annual budget
D. Maintaining records of sales and purchases

Answer: B. Planning, organizing, directing and controlling the financial activities of a business
Financial management deals with acquiring, using, and controlling funds in the most effective manner. It covers financing, investment, dividend, and working capital decisions.

Which of the following is a decision area of financial management?

A. Production decision
B. Marketing decision
C. Investment decision ✓
D. Personnel decision

Answer: C. Investment decision
Investment decision is one of the key decisions in financial management. It relates to the allocation of funds to different assets or projects.

A company wants to decide whether to buy a new machine or expand an existing plant. This is an example of:

A. Financing decision
B. Dividend decision
C. Investment decision ✓
D. Working capital decision

Answer: C. Investment decision
Choosing between different long-term assets is an investment decision. It involves selecting the most profitable use of funds.

A firm has stable and predictable earnings. Which capital structure choice is generally more suitable from the point of view of risk-bearing capacity?

A. Very high debt because interest burden is always safe
B. More debt can be considered because the firm can service fixed charges better ✓
C. No equity should be used
D. Only short-term loans should be used for fixed assets

Answer: B. More debt can be considered because the firm can service fixed charges better
Firms with stable earnings can usually bear fixed interest charges better than uncertain firms. Hence, they may use a relatively higher level of debt.

Which of the following is the most appropriate order of financial management decisions in a business?

A. Dividend, investment, financing
B. Financing, dividend, investment
C. Investment, financing, dividend ✓
D. Investment, dividend, financing

Answer: C. Investment, financing, dividend
First, funds are invested in assets and projects; then financing is arranged; finally, dividend decisions are taken from the profits earned. This reflects the main financial decision areas in the chapter.

← Previous Chapter

Chapter 8: Controlling

Next Chapter →

Chapter 10: Marketing