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Year 11 Exam  >  Year 11 Tests  >  Test: Business Finance - Year 11 MCQ

Test: Business Finance - Year 11 MCQ


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10 Questions MCQ Test - Test: Business Finance

Test: Business Finance for Year 11 2024 is part of Year 11 preparation. The Test: Business Finance questions and answers have been prepared according to the Year 11 exam syllabus.The Test: Business Finance MCQs are made for Year 11 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Business Finance below.
Solutions of Test: Business Finance questions in English are available as part of our course for Year 11 & Test: Business Finance solutions in Hindi for Year 11 course. Download more important topics, notes, lectures and mock test series for Year 11 Exam by signing up for free. Attempt Test: Business Finance | 10 questions in 20 minutes | Mock test for Year 11 preparation | Free important questions MCQ to study for Year 11 Exam | Download free PDF with solutions
Test: Business Finance - Question 1
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What is the primary reason businesses need finance?

Detailed Solution for Test: Business Finance - Question 1
Businesses require finance primarily to fund their start-up costs and to expand their operations over time.
Test: Business Finance - Question 2
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Which of the following is an example of internal source of finance?

Detailed Solution for Test: Business Finance - Question 2
Internal sources of finance include retained profits, where businesses use their accumulated earnings to fund activities.
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Test: Business Finance - Question 3
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Why might a business prefer short-term sources of finance over long-term ones?

Detailed Solution for Test: Business Finance - Question 3
Short-term finance is often preferred for its accessibility and quick availability to cover immediate needs without committing to long-term obligations.
Test: Business Finance - Question 4
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Which type of finance is typically used to purchase machinery and equipment?
Detailed Solution for Test: Business Finance - Question 4
Leasing is commonly used to finance the acquisition of machinery and equipment, spreading costs over a fixed period.
Test: Business Finance - Question 5
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What is an example of an external source of finance?
Detailed Solution for Test: Business Finance - Question 5
External sources of finance include trade credit extended by suppliers, allowing businesses to purchase goods and services on credit terms.
Test: Business Finance - Question 6
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Why might a business opt for equity financing over debt financing?
Detailed Solution for Test: Business Finance - Question 6
Equity financing involves selling shares of ownership, avoiding debt obligations and interest payments associated with debt financing.
Test: Business Finance - Question 7
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Which financial source is suitable for funding short-term cash flow gaps?
Detailed Solution for Test: Business Finance - Question 7
Factoring involves selling accounts receivable to a third party for immediate cash, addressing short-term liquidity needs.
Test: Business Finance - Question 8
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What is a characteristic of debentures as a source of finance?
Detailed Solution for Test: Business Finance - Question 8
Debentures are unsecured loans issued by companies, offering a fixed interest rate to investors.
Test: Business Finance - Question 9
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Which source of finance requires periodic interest payments?
Detailed Solution for Test: Business Finance - Question 9
Bank overdrafts require businesses to pay interest on the amount borrowed, typically calculated on a daily basis.
Test: Business Finance - Question 10
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How does a business decide between leasing and outright purchase of assets?
Detailed Solution for Test: Business Finance - Question 10
Businesses evaluate factors such as tax advantages, cash flow impact, and maintenance costs when choosing between leasing and outright purchase of assets.
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