Arts (English Medium) Class 12 - CBSE Important Questions for Business Studies

Raman and Vasudev were two employees who were embezzling an import-export company in Varanasi where they were working. The finance manager of the company Sampat Singh became suspicious of the two employees when he realized that their activities were not being performed as per the plans. He installed a software program that could secretly log every single stroke of the suspects’ computer keys and send an encrypted email report to the Cyber police. The police were able to catch the two dishonest employees red handed and arrest them. Identify the function of management being discussed above.

Explain the following as factor affecting the requirements of fixed capital:

Natural of business

Explain the following as factor affecting the requirements of fixed capital:

Growth prospects

Explain the following as factor affecting the requirements of fixed capital:

Diversification

Explain the following as factor affecting the requirements of fixed capital:

Level of collaboration

Explain the following as factor affecting 'financing decision'.

Cash flow position of the business

Explain the following as factor affecting 'financing decision'.

Level of fixed operating cost

Explain the following as factor affecting 'financing decision'.

Control consideration

Explain the following as factor affecting 'financing decision'.

State of capital markets

Explain the following as factors affecting the requirement of working capital:

The credit allowed and availed

Explain the following as factors affecting the choice of capital structure:

Return on Investment

Explain the following as factors affecting the choice of capital structure:

Flexibility

Explain the following as factors affecting the choice of capital structure:

Risk Consideration

Explain the following as factors affecting the choice of capital structure:

Control

Varunica Ltd., a reputed truck manufacturing company, needs rupees twenty crores as additional capital to expand its business. Mr. Alind Jindal, the CEO of the company, wants to raise funds through equity. The Finance Manager, Mr. Nikhil Sachdeva, suggests that the existing shareholders be offered the privilege to subscribe to new issue of shares as per the terms and conditions of the company which was agreed by Mr. Alind Jindal.
Name the method through which the company decided to raise additional capital. 

Explain any four factors that affect the choice of capital structure of a company. 

Explain the twin objectives of financial planning.

Answer the following question.
'Determining the relative proportion of various types of funds depends upon various factors.' Explain any six such factors.

Krish limited is in the business of manufacturing and exporting carpets and other home decor products. It has a share capital of ₹ 70 lacs at the face value of ₹ 100 each. Company is considering a major expansion of its production facilities and wants to raise ₹ 50 lacs. The finance manager of the company Mr. Prabhakar has recommended that the company can raise funds of the same amount by issuing 7% debentures. Given that earning per share of the company after expansion is ₹ 35 and tax rate is 30%, did Mr. Prabhakar give a justified recommendation?

Show the working.

Identify the financial decision that is concerned with deciding how much of the profit earned by a company is to be distributed to shareholders and how much should be retained in the business. Also state any three factors affecting the identified decision.