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Target Exam

CUET

Subject

Business Studies

Chapter

Financial Management

Question:

Match the following:

1. Business finance  A. Long-term: Capital budgeting decision, Short-term: Working capital decision
2. Financing decision B. Optimal procurement as well as usage of finance
3. Investment decision C. Money required for carrying out business activities
4. Financial management D. Quantum of finance raised from various long-term sources
Options:

1-D, 2-C, 3-A, 4-B

1-C, 2-D, 3-A, 4-B

1-A, 2-B, 3-D, 4-C

1-C, 2-D, 3-B, 4-A

Correct Answer:

1-C, 2-D, 3-A, 4-B

Explanation:

Business finance: Almost all business activities require some finance. Finance is needed to establish a business, to run it, to modernize it, to expand, or diversify it. Money required for carrying out business activities is called business finance.

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

Investment decision: Investment decision can be long-term or short-term. A long-term investment decision is also called a Capital Budgeting decision. Short-term investment decisions (also called working capital decisions) are concerned with the decisions about the levels of cash, inventory and receivables. 

Financial management: All finance comes at some cost. It is quite imperative that it needs to be carefully managed. Financial Management is concerned with optimal procurement as well as the usage of finance.

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