CBSE Class 12 Financial Management Multiple Choice Questions with Answers. MCQ Questions Class 12 Financial Management with Answers Is Prepared Based on Latest Exam Pattern. Students can solve NCERT MCQ questions Class 12 Financial Management with Answers to know their preparation level.
Students who are searching for NCERT MCQ Questions Class 12 Financial Management with Answers are compiled here to get good practice on all fundamentals. Know your preparation level on MCQ Questions for Class 12 Financial Management with Answers. You can also verify your answers from the provided MCQ Class 12 Financial Management with Answers. So, ace up your preparation with MCQ of Class 12 Business Studies Examinations.
MCQ Questions Class 12 Financial Management with Answers - Set - 4
Question 1:Â
A decision to acquire a new and modern plant to upgrade an old one is a
a. Financing decision
b. Working capital decision
c. Investment decision
d. None of the above
Correct Answer – (C)
Question 2:Â
Assertion (A) A sound financial plan should be rigid.
Reason (R) In a financing program, flexibility for future should not be allowed.
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is true, but Reason (R) is false
(d) Assertion (A) is false, but Reason (R) is true
Correct Answer – (B)
Question 3:Â
Assertion (A) Financial planning means estimating the requirements of a business and determining source of funds.
Reason (R) Capital structure refers to the mix between owners and borrowed funds.
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is true, but Reason (R) is false
(d) Assertion (A) is false, but Reason (R) is true
Correct Answer – (B)
Question 4:Â
Assertion (A) Primary aim of financial management is to maximise shareholder’s wealth.
Reason (R) Company’s funds belong to the shareholders and the return earned by them determine their market value and price.
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is true, but Reason (R) is false
(d) Assertion (A) is false, but Reason (R) is true
Correct Answer – (A)
Question 5:Â
Assertion (A) Financial management is an imaginative function.
Reason (R) Financial management is one of the functional areas of management.
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is true, but Reason (R) is false
(d) Assertion (A) is false, but Reason (R) is true
Correct Answer – (D)
MCQ Questions Class 12 Financial Management With Answers
Question 6:Â
The Cheapest source of finance is:.
a. Debenture
b. Equity share capital
c. Preference share
d. Retained earnings
Correct Answer – (D)
Question 7:Â
Assertion (A) Finance is the life blood of business.
Reason (R) Finance is very essential for the smooth running of the business.
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is true, but Reason (R) is false
(d) Assertion (A) is false, but Reason (R) is true
Correct Answer – (A)
Question 8:Â
Assertion (A) Effective and efficient management of finance enables the firm to prosper and grow.
Reason (R) Without adequate finance, business can survive only for a short time.
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is true, but Reason (R) is false
(d) Assertion (A) is false, but Reason (R) is true
Correct Answer – (C)
Question 9:Â
Assertion (A) Shareholders Wealth Maximisation (SWM) and not the profit maximisation is an appropriate and operationally feasible financial management goal.
Reason (R) There exists a principal agent relationship between the shareholders and the management of the company.
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is true, but Reason (R) is false
(d) Assertion (A) is false, but Reason (R) is true
Correct Answer – (B)
Question 10:Â
Assertion (A) Business finance refers to the money required for carrying out business activities.
Reason (R) Financing decisions involves careful selection of assets, in which funds are to be invested.
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is true, but Reason (R) is false
(d) Assertion (A) is false, but Reason (R) is true
