Mr. Z wants to expand his business. So he borrowed Rs 20,00,000 from his friend Mr X. With the help of this fund he has to increase his productivity. But he decided that he will divide this fund into two parts Fixed Capital and Working Capital.
Identify the financial decision he has taken for distribution of funds into fixed and working capital.
(

This question was previously asked in

Shift 13/06/2023 12:00 PM - 2:00 PM

Attempt Online
A
Investment Decision
B
Dividend Decision
C
Financing Decision
D
Management Decision
Correct answer

Correct Answer

Investment Decision
Details icon
Detailed Explanation
  • Investment decision can be longterm or short-term. A long-term investment decision is also called a Capital Budgeting decision. It involves committing the finance on a long term basis. Fixed capital refers to investment in long-term assets.  Apart from the investment in fixed assets every business organisation needs to invest in current assets. This investment facilitates smooth day-today operations of the business
  •  Dividend decision Dividend is that portion of profit which is distributed to shareholders. The decision involved here is how much of the profit earned by company (after paying tax) is to be distributed to the shareholders and how much of it should be retained in the business
  • Financing Decision This decision is about the quantum of finance to be raised from various long-term sources. Short-term sources are studied under the ‘working capital management’.
Get Dubuddy App

Practice on the go with our mobile app

Questions icon
More CUET Questions
1

'Planning requires application of the mind involving foresight, intelligent imagination and sound
judgment.' Name the feature of planning highlighted in the above line ?

(

Arrow
2

In XYZ Ltd., Top management undertakes planning for the organisation as a whole, Middle
management does the departmental planning and at the lowest level day to day operational planning
is done by Supervisors.   Which feature of planning is indicated by the above explanation?
(

Arrow
3

Name the type of training to be imparted when employees are required to handle sophisticated machinery and equipment. (

Arrow
4

When the prices are rising continuously in the market then what will be the Working Capital requirement for a Trading company ?
(

Arrow
Test Series
CUET Subjects
Your CUET Journey Starts with DuBuddy

CUET ki Practice Means DuBuddy Pe Practice

Mr. Z wants to expand his business. So he borrowed Rs 20,00,000 from his friend Mr X. With the help of this fund he has to increase his productivity. But he decided that he will divide this fund into two parts Fixed Capital and Working Capital. Identify the financial decision he has taken for distribution of funds into fixed and working capital. ( – Answer & Explanation | CUET Subject PYQ – Dubuddy