Direction: Read the following text and answer the following questions on the basis of the same:Sunrises Ltd. dealing in readymade garments, is planning to expand its business operations in order to cater to international market. For this purpose, the company needs additional ₹ 80,00,000 for replacing machines with modern machinery of higher production capacity. It involves committing the finance on a long-term basis. These decisions are very crucial for any business since they affect its earning capacity in the long run. The company wishes to raise the required funds by issuing debentures. The debt can be issued at an estimated cost of 10%. The EBIT for the previous year of the company was ₹ 8,00,000 and total capital investment was ₹ 1,00,00,000. Instead of issuing 10% debenture the company can issue equity shares for raising the funds. The financial manager of the company would normally opt for a source which is the cheapest.Q. A decision for replacing machines with modern machinery of higher production capacity is a:a)Financing decisionb)Working capital decisionc)Investment decisiond)None of the aboveCorrect answer is option 'C'. Can you explain this answer?

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Direction: Read the following text and answer the following questions on the basis of the same:

Sunrises Ltd. dealing in readymade garments, is planning to expand its business operations in order to cater to international market. For this purpose, the company needs additional ₹ 80,00,000 for replacing machines with modern machinery of higher production capacity. It involves committing the finance on a long-term basis. These decisions are very crucial for any business since they affect its earning capacity in the long run. The company wishes to raise the required funds by issuing debentures. The debt can be issued at an estimated cost of 10%. The EBIT for the previous year of the company was ₹ 8,00,000 and total capital investment was ₹ 1,00,00,000. Instead of issuing 10% debenture the company can issue equity shares for raising the funds. The financial manager of the company would normally opt for a source which is the cheapest.

Q. A decision for replacing machines with modern machinery of higher production capacity is a:

a)
Financing decision
b)
Working capital decision
c)
Investment decision
d)
None of the above

Correct answer is option 'C'. Can you explain this answer?

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Direction: Read the following text and answer the following questions...

Investment decision It relates to as how the funds of a firm are to be invested into different assets, so that the firm is able to earn highest possible return for the investors. Investment decision can be long-term, also known as capital budgeting where the funds are commited into long-term basis.

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Direction: Read the following text and answer the following questions...

Investment decision:

Replacing machines with modern machinery of higher production capacity is an investment decision because it involves committing funds for acquiring assets that are expected to generate returns over a long period of time.

- Long-term commitment: This decision involves committing finance on a long-term basis, which makes it an investment decision rather than a short-term working capital decision.
- Impact on earning capacity: The decision to upgrade machinery will affect the company's earning capacity in the long run by increasing production efficiency and potentially leading to higher profits.
- Strategic planning: Expanding business operations to cater to the international market requires strategic planning and investment in resources that can support this expansion.
- Capital investment: The decision to invest in modern machinery involves a significant capital outlay, which is characteristic of investment decisions rather than day-to-day operational decisions.
- Focus on long-term growth: By opting to upgrade machinery for higher production capacity, Sunrises Ltd. is focusing on long-term growth and sustainability, which aligns with the nature of investment decisions.

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Direction: Read the following text and answer the following questions on the basis of the same:Sunrises Ltd. dealing in readymade garments, is planning to expand its business operations in order to cater to international market. For this purpose, the company needs additional ₹ 80,00,000 for replacing machines with modern machinery of higher production capacity. It involves committing the finance on a long-term basis. These decisions are very crucial for any business since they affect its earning capacity in the long run. The company wishes to raise the required funds by issuing debentures. The debt can be issued at an estimated cost of 10%. The EBIT for the previous year of the company was ₹ 8,00,000 and total capital investment was ₹ 1,00,00,000. Instead of issuing 10% debenture the company can issue equity shares for raising the funds. The financial manager of the company would normally opt for a source which is the cheapest.Q. A decision for raising fund of ₹ 80,00,000 either from 10% debenture or equity shares is a

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Direction: Read the following text and answer the following questions on the basis of the same:Sunrises Ltd. dealing in readymade garments, is planning to expand its business operations in order to cater to international market. For this purpose, the company needs additional ₹ 80,00,000 for replacing machines with modern machinery of higher production capacity. It involves committing the finance on a long-term basis. These decisions are very crucial for any business since they affect its earning capacity in the long run. The company wishes to raise the required funds by issuing debentures. The debt can be issued at an estimated cost of 10%. The EBIT for the previous year of the company was ₹ 8,00,000 and total capital investment was ₹ 1,00,00,000. Instead of issuing 10% debenture the company can issue equity shares for raising the funds. The financial manager of the company would normally opt for a source which is the cheapest.Q. What is the other name of long-term decision ?

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Direction: Read the following text and answer the following questions on the basis of the same:Sunrises Ltd. dealing in readymade garments, is planning to expand its business operations in order to cater to international market. For this purpose, the company needs additional ₹ 80,00,000 for replacing machines with modern machinery of higher production capacity. It involves committing the finance on a long-term basis. These decisions are very crucial for any business since they affect its earning capacity in the long run. The company wishes to raise the required funds by issuing debentures. The debt can be issued at an estimated cost of 10%. The EBIT for the previous year of the company was ₹ 8,00,000 and total capital investment was ₹ 1,00,00,000. Instead of issuing 10% debenture the company can issue equity shares for raising the funds. The financial manager of the company would normally opt for a source which is the cheapest.Q. The financing decisions are affected by various factors. Which one of the following factor is discussed in the above case?

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Direction: Read the following text and answer the following questions on the basis of the same:Sunrises Ltd. dealing in readymade garments, is planning to expand its business operations in order to cater to international market. For this purpose, the company needs additional ₹ 80,00,000 for replacing machines with modern machinery of higher production capacity. It involves committing the finance on a long-term basis. These decisions are very crucial for any business since they affect its earning capacity in the long run. The company wishes to raise the required funds by issuing debentures. The debt can be issued at an estimated cost of 10%. The EBIT for the previous year of the company was ₹ 8,00,000 and total capital investment was ₹ 1,00,00,000. Instead of issuing 10% debenture the company can issue equity shares for raising the funds. The financial manager of the company would normally opt for a source which is the cheapest.Q. A decision for replacing machines with modern machinery of higher production capacity is a:a)Financing decisionb)Working capital decisionc)Investment decisiond)None of the aboveCorrect answer is option 'C'. Can you explain this answer?

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Direction: Read the following text and answer the following questions on the basis of the same:Sunrises Ltd. dealing in readymade garments, is planning to expand its business operations in order to cater to international market. For this purpose, the company needs additional ₹ 80,00,000 for replacing machines with modern machinery of higher production capacity. It involves committing the finance on a long-term basis. These decisions are very crucial for any business since they affect its earning capacity in the long run. The company wishes to raise the required funds by issuing debentures. The debt can be issued at an estimated cost of 10%. The EBIT for the previous year of the company was ₹ 8,00,000 and total capital investment was ₹ 1,00,00,000. Instead of issuing 10% debenture the company can issue equity shares for raising the funds. The financial manager of the company would normally opt for a source which is the cheapest.Q. A decision for replacing machines with modern machinery of higher production capacity is a:a)Financing decisionb)Working capital decisionc)Investment decisiond)None of the aboveCorrect answer is option 'C'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Direction: Read the following text and answer the following questions on the basis of the same:Sunrises Ltd. dealing in readymade garments, is planning to expand its business operations in order to cater to international market. For this purpose, the company needs additional ₹ 80,00,000 for replacing machines with modern machinery of higher production capacity. It involves committing the finance on a long-term basis. These decisions are very crucial for any business since they affect its earning capacity in the long run. The company wishes to raise the required funds by issuing debentures. The debt can be issued at an estimated cost of 10%. The EBIT for the previous year of the company was ₹ 8,00,000 and total capital investment was ₹ 1,00,00,000. Instead of issuing 10% debenture the company can issue equity shares for raising the funds. The financial manager of the company would normally opt for a source which is the cheapest.Q. A decision for replacing machines with modern machinery of higher production capacity is a:a)Financing decisionb)Working capital decisionc)Investment decisiond)None of the aboveCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Direction: Read the following text and answer the following questions on the basis of the same:Sunrises Ltd. dealing in readymade garments, is planning to expand its business operations in order to cater to international market. For this purpose, the company needs additional ₹ 80,00,000 for replacing machines with modern machinery of higher production capacity. It involves committing the finance on a long-term basis. These decisions are very crucial for any business since they affect its earning capacity in the long run. The company wishes to raise the required funds by issuing debentures. The debt can be issued at an estimated cost of 10%. The EBIT for the previous year of the company was ₹ 8,00,000 and total capital investment was ₹ 1,00,00,000. Instead of issuing 10% debenture the company can issue equity shares for raising the funds. The financial manager of the company would normally opt for a source which is the cheapest.Q. A decision for replacing machines with modern machinery of higher production capacity is a:a)Financing decisionb)Working capital decisionc)Investment decisiond)None of the aboveCorrect answer is option 'C'. Can you explain this answer?.

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The EBIT for the previous year of the company was ₹ 8,00,000 and total capital investment was ₹ 1,00,00,000. Instead of issuing 10% debenture the company can issue equity shares for raising the funds. The financial manager of the company would normally opt for a source which is the cheapest.Q. A decision for replacing machines with modern machinery of higher production capacity is a:a)Financing decisionb)Working capital decisionc)Investment decisiond)None of the aboveCorrect answer is option 'C'. Can you explain this answer?, a detailed solution for Direction: Read the following text and answer the following questions on the basis of the same:Sunrises Ltd. dealing in readymade garments, is planning to expand its business operations in order to cater to international market. For this purpose, the company needs additional ₹ 80,00,000 for replacing machines with modern machinery of higher production capacity. It involves committing the finance on a long-term basis. 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