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प्रश्न
Study the following case/situation and express your opinion.
A company is planning to enhance it's production capacity and is evaluating the possibility of purchasing new machinery whose cost is 2 crore or has alternative of machinery available on lease basis.
- What type of asset is machinery?
- Capital used for purchase of machinery is fixed capital or working capital?
- Does the size of a business determine the fixed capital requirement?
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उत्तर
- Machinery is fixed asset since it is used in business for longer time period.
- The capital used for purchase of machinery is fixed capital.
- Yes, size of a business determines the fixed capital requirement. When business operations are carried out on a large scale, it will have higher fixed capital requirement as most of the production processes are based on automatic machines and equipment.
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संबंधित प्रश्न
Match the correct pairs:
| Group “A” | Group “B” | ||
| 1 | Financial planning | a. | Dividend |
| 2 | Public deposit | b. | Less applications than expected |
| 3 | Private placement | c | Owned capital |
| 4 | Secured debentures | d. | Advance programming of the financial plan |
| 5 | Return on share | e. | Bonus |
| f. | Issuing shares without inviting the public for subscription |
||
| g. | Maximum 7 years | ||
| h. | Security about repayment | ||
| i. | Maximum 36 months | ||
| j. | Management of business activities |
Write a word or a term or a phrase which can substitute the following statement.
The decision of finance manager which ensures that firm is well capitalised.
Complete the sentence.
When there is boom in economy, sales will ______
Complete the sentence.
During recession period sales will ______
Answer in one sentence.
Define corporate finance.
Answer in one sentence.
What is production cycle?
Correct the underlined word and rewrite the following sentence.
Share is an acknowledgment of loan raised by company.
Correct the underlined word and rewrite the following sentence.
Equity shares carry dividend at fixed rate.
What is corporate finance and state two decisions which are the basis of corporate finance?
Discuss the importance of corporate finance.
Business firm gives green signal to the project only when it is profitable.
Select the correct option from the bracket and complete the table:
(Funds for long-term, Rights issue, 36 months, Deploy funds in systematic manner, Charge on tangible assets)
| Group 'A' | Group 'B' | ||
| (a) | Investment decision | (1) | ____________ |
| (b) | ____________ | (2) | Shares offered to existing equity shareholders |
| (c) | Secured deposits | (3) | ____________ |
| (d) | ____________ | (4) | Maximum period of deposits |
| (e) | Capital market | (5) | ____________ |
Business firm gives green signal to the project only when it is profitable.
Match the pairs:
| Group ‘A’ | Group ‘B’ | ||
| (a) | Capital budgeting | (1) | Unsecured Debenture |
| (b) | Regret Letter | (2) | 1956 |
| (c) | Board of Directors | (3) | Investment decision |
| (d) | Depository Act | (4) | Allotment of shares |
| (e) | Final Dividend | (5) | Decided and declared by Board of Directors |
| (6) | Financing decision | ||
| (7) | Decided by Board and declared by members | ||
| (8) | 1996 | ||
| (9) | Power to issue debentures | ||
| (10) | Non-Allotment of shares |
Business firm gives green signal to the project only when it is profitable.
Liberal credit policy creates a problem of bad debts.
Finance is the management of ______ affairs of the company.
