Q1:

Question Type: Concept

Question Variety: Text Based
Difficulty:Easy
Expected Time to Solve (in seconds):30
Topic: Business finance and marketing
Concept: Financial management
Sub Concept: Meaning of business finance
Concept Field: N/A

Business finance refers to_________.

A. Amount required to carry out business activities
B. Amount required to make interest payment on the loan funds
C. Amount required to meet day to day expenses
D. Amount required for distribution of dividend

Solution: A
Explanation- Business finance refers to the amount that is required in the business firm to
carry out its operations. In other words, finance needed by the firm to operate smoothly is
referred as business finance.

Q2:

Question Type: Concept

Question Variety: Text Based
Difficulty: Easy
Expected Time to Solve (in seconds):30
Topic: Business finance and marketing
Concept: Financial management
Sub Concept: Meaning of business finance
Concept Field: N/A

Identify the need of business finance at different stages of business.

A. To modernize
B. To diversify
C. To expand
D. All of the above
Solution: D
Explanation- Business may require finance at various levels for various purposes. Some of
the reasons to raise business finance may include running a business, to modernize it, to
establish the business, to diversify, etc.

Q3:

Question Type: Concept

Question Variety: Text Based
Difficulty: Medium
Expected Time to Solve (in seconds):60
Topic: Business finance and marketing
Concept: Financial management
Sub Concept: Meaning of business finance
Concept Field: N/A

The business finance required to purchase tangible or intangible assets is referred as______.
A. Working capital
B. Fixed capital
C. Semi-variable capital
D. All of the above
Solution: D
Explanation- before taking any merger and acquisition decision, the financial manager must
consider some of the financial aspects such as working capital requirement after acquiring the
target firm, financial risk involved and other financing decision areas.
Q4:

Question Type: Concept

Question Variety: Text Based
Difficulty: Hard
Expected Time to Solve (in seconds):120
Topic: Business finance and marketing
Concept: Financial management
Sub Concept: Meaning of business finance
Concept Field: N/A

Assertion (A): Business finance that is required to meet daily expenses is referred as working
capital.
Reason (R): Working capital is required to purchase raw material, to pay wages and salaries,
to pay rent, etc.
Choose the correct answer from the following code:
A. Both (A) and (R) are true and (R) is the correct explanation of (A).
B. Both (A) and (R) are true, but (R) is not the correct explanation of (A).
C. (A) is true but (R) is false
D. (A) is false but (R) is true
Solution: A
Explanation- Business finance that is required to meet daily expenses is referred as working
capital. Working capital is different from fixed capital requirement as it is required on day to
day basis whereas fixed capital is one time lump sum investment. Working capital is required
to pay rent, wages, salary, etc.
Q5:

Question Type: Concept

Question Variety: Text Based
Difficulty: Hard
Expected Time to Solve (in seconds):120
Topic: Business finance and marketing
Concept: Financial management
Sub Concept: Meaning of business finance
Concept Field: N/A

Assertion (A): The requirement of business finance can be classified as working capital
requirement and fixed capital requirement.
Reason (R): To purchase intangible asset, the capital required is categorized under working
capital requirement.
Choose the correct answer from the following code:
A. Both (A) and (R) are true and (R) is the correct explanation of (A).
B. Both (A) and (R) are true, but (R) is not the correct explanation of (A).
C. (A) is true but (R) is false
D. (A) is false but (R) is true
Solution: C
Explanation- The requirement of business finance can be classified as working capital
requirement and fixed capital requirement. To purchase intangible asset, the capital required
is categorized under fixed capital requirement.