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B Com Exam  >  B Com Tests  >  Business Economics & Finance  >  Test: Financial Planning and Administration - 1 - B Com MCQ

Test: Financial Planning and Administration - 1 - B Com MCQ


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10 Questions MCQ Test Business Economics & Finance - Test: Financial Planning and Administration - 1

Test: Financial Planning and Administration - 1 for B Com 2024 is part of Business Economics & Finance preparation. The Test: Financial Planning and Administration - 1 questions and answers have been prepared according to the B Com exam syllabus.The Test: Financial Planning and Administration - 1 MCQs are made for B Com 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Financial Planning and Administration - 1 below.
Solutions of Test: Financial Planning and Administration - 1 questions in English are available as part of our Business Economics & Finance for B Com & Test: Financial Planning and Administration - 1 solutions in Hindi for Business Economics & Finance course. Download more important topics, notes, lectures and mock test series for B Com Exam by signing up for free. Attempt Test: Financial Planning and Administration - 1 | 10 questions in 10 minutes | Mock test for B Com preparation | Free important questions MCQ to study Business Economics & Finance for B Com Exam | Download free PDF with solutions
Test: Financial Planning and Administration - 1 - Question 1
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What is the primary goal of Financial Planning?

Detailed Solution for Test: Financial Planning and Administration - 1 - Question 1
Financial planning primarily aims to ensure effective and efficient utilization of financial resources within an organization. It involves the careful management of funds to achieve the company's goals and objectives.
Test: Financial Planning and Administration - 1 - Question 2
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Which of the following is NOT considered a component of fixed capital?

Detailed Solution for Test: Financial Planning and Administration - 1 - Question 2
Cash in hand is not considered a component of fixed capital. Fixed capital typically includes tangible assets like machinery, land, and buildings, as well as intangible assets like patents and copyrights.
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Test: Financial Planning and Administration - 1 - Question 3
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What is the main purpose of determining capital requirements in financial planning?

Detailed Solution for Test: Financial Planning and Administration - 1 - Question 3
The main purpose of determining capital requirements in financial planning is to ensure that adequate funds are available to support the company's operations and investments. It helps maintain financial stability within the organization.
Test: Financial Planning and Administration - 1 - Question 4
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Which of the following is NOT a characteristic of fixed capital?
Detailed Solution for Test: Financial Planning and Administration - 1 - Question 4
Fixed capital is not used for day-to-day operational expenses; it is primarily used for acquiring fixed assets and supporting long-term business needs. Day-to-day expenses are typically covered by working capital.
Test: Financial Planning and Administration - 1 - Question 5
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What does the term "capital structure" refer to in financial management?
Detailed Solution for Test: Financial Planning and Administration - 1 - Question 5
Capital structure refers to the mix of debt and equity that a company uses to finance its operations and investments. It determines how a company is funded and influences its financial stability.
Test: Financial Planning and Administration - 1 - Question 6
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What is the primary goal of optimizing the capital structure of a firm?
Detailed Solution for Test: Financial Planning and Administration - 1 - Question 6
The primary goal of optimizing the capital structure of a firm is to achieve the lowest weighted average cost of capital (WACC). This helps minimize the cost of financing while maintaining financial stability.
Test: Financial Planning and Administration - 1 - Question 7
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In the context of capital structure, what is the tradeoff associated with equity financing?
Detailed Solution for Test: Financial Planning and Administration - 1 - Question 7
The tradeoff associated with equity financing is a higher risk for investors. Equity investors bear more risk as they have a residual claim on assets and expect a higher rate of return compared to debt investors.
Test: Financial Planning and Administration - 1 - Question 8
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What is the main purpose of a leveraged buyout (LBO) transaction?
Detailed Solution for Test: Financial Planning and Administration - 1 - Question 8
The main purpose of a leveraged buyout (LBO) transaction is to invest the smallest amount of equity and use borrowed funds to finance the acquisition of a company. This strategy is often used by private equity firms.
Test: Financial Planning and Administration - 1 - Question 9
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How does a company typically optimize its capital structure in a merger and acquisition (M&A) transaction?
Detailed Solution for Test: Financial Planning and Administration - 1 - Question 9
In an M&A transaction, a company typically optimizes its capital structure by increasing the value of equity on its balance sheet, especially if it uses its own shares as consideration for the acquisition.
Test: Financial Planning and Administration - 1 - Question 10
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What is the primary objective of financial planning in an enterprise?
Detailed Solution for Test: Financial Planning and Administration - 1 - Question 10
The primary objective of financial planning in an enterprise is to maximize returns on investment by effectively managing financial resources and making informed financial decisions.
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