Business Studies MCQs for Class 12 with Answers Chapter 9 Financial Management

Are you guys looking for NCERT MCQ Questions for Class 12 Business Studies with Answers PDF Free Download? You came to the right page. This may assist you to understand and check your knowledge about the chapters. Students also can take a free test of the Multiple Choice Questions of Class 12 Business Studies. Each question has four options followed by the right answer. These MCQ Questions are selected supported by the newest exam pattern as announced by CBSE.


Q.1 Business finance is needed to

(a) Establish a business
(b) Run a business
(c) Expand a business
(d) All of the above

(d) All of the above


Q.2 Which of the following is not a tangible asset?

(a) Machinery
(b) Trademarks
(c) Factories
(d) Offices

(b) Trademarks


Q.3 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

(d) All of the above


Q.4 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

(d) All of the above


Q.5 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

(a) Investment decision


Q.6 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

(d) Capital budgeting decision


Q.7 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

(b) Capital budgeting decision


Q.8 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

(c) Working capital decision


Q.9 Dev has two projects A and B in hand. The same amount of risk is involved in both the projects. If the rate of return of project A and B is 20% and 15% respectively, then under normal circumstance, which of the two projects is likely to be selected?

(a) Project A
(b) Project B
(c) Both project A and project B
(d) None of the above

(a) Project A


Q.10 This decision is about the quantum of finance to be raised from various long-term sources.

(a) Investment decision
(b) Financing decision
(c) Dividend decision
(d) Capital budgeting decision

(b) Financing decision


Q.11 Which one of the following is related to planning, organising, directing and controlling of financial activities?

(a) Financial decision
(b) Capital structure
(c) Investment decision
(d) Financial management

(d) Financial management


Q.12 Wealth maximisation depends on

(a) market price per share.
(b) market price of finished good.
(c) market price of inventory.
(d) market price of fixed assets.

(a) market price per share.


Q.13 Investment decision involves

(a) investment in fixed assets.
(b) investment in current assets.
(c) investment in fixed and current assets.
(d) investment in Government securities.

(c) investment in fixed and current assets.


Q.14 If dividend portion of total earnings is high, portion of retained earnings will be

(a) high.
(b) low.
(c) moderate.
(d) equal.

(b) low.


Q.15 Financial procedures are determined by

(a) financial planning.
(b) financial leverage.
(c) financial decisions.
(d) capital structure.

(a) financial planning.


Q.16 Capital structure shows

(a) Debtor-creditor ratio.
(b) Fixed assets-current assets ratio.
(c) Debt-equity ratio.
(d) Interest coverage ratio.

(c) Debt-equity ratio.


Q.17 Fixed capital requirements are determined by

(a) nature of business.
(b) nature of business environment.
(c) nature of Government control.
(d) nature of marketing efforts.

(a) nature of business.


Q.18 Working capital requirements are low when an organisation has

(a) high technology.
(b) high debtors.
(c) high inventory.
(d) high creditors.

(d) high creditors.


Q.19 _ is concerned with optimum procurement as well as usage of finance.

(a) Financial Analysis
(b) Financial Planning
(c) Financial Management
(d) Budgeting

(c) Financial Management


Q.20 _ is the time span between acquisition of goods and realisation of sale proceeds.

(a) Working capital
(b) Payback Period
(c) Operating Cycle
(d) Account Receivables Period

(c) Operating Cycle


Q.21 _ Gross working capital represents the total investment in assets.

(a) Current
(b) Fixed
(c) Tangible
(d) Intangible

(a) Current


Class 12 Business Studies MCQ Chapter Wise

Chapter 1: Nature and Significance of Management
Chapter 2: Principles of Management
Chapter 3: Business Environment
Chapter 4: Planning
Chapter 5: Organising
Chapter 6: Staffing
Chapter 7: Directing
Chapter 8: Controlling
Chapter 9: Financial Management
Chapter 10: Financial Markets
Chapter 11: Marketing Management
Chapter 12: Consumer Protection
Chapter 13: Entrepreneurship Development

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