LOTUS INSTITUTE

Unit test
Date: Sub: S.P Std: H.S.C Marks: 80 m Time: 3 Hrs
Q.1.(A) Select the correct options and rewrite the statements: 5M
1. refers to the capital invested in fixed assets.
2. When there is a boom in the economy will increase.
3. is ploughing back of profit.
4. Debenture holders are of the company.
5. Reserve capital is a part of
(B) Odd one out: 5M
1. Land and building, Plant, Machinery, Cash
2. Fixed capital, Working capital, Capital structure
3. Debenture, Public deposit, Retained earnings
4. Share certificate, Debenture certificate, ADR
5. Trade credit, Overdraft, Cash credit
(C) Write a word or a term or a phrase: 5M
1. Finance is related to money and money management.
2. The excess of current asset over current liabilities is called fixed capital.
3. The process of converting raw material into finished goods is called production
cycle.
4. Only fully paid up shares can be forfeited.
5. Equity share capital is also known as venture capital.
(D) Correct the underline word and rewrite the sentences: 5M
1. Equity shares carry dividend at Fixed rate.
2. Finance is needed to pay dividend to debenture holders.
3. Share is an acknowledgement of loan raised by the company.
4. Retained earnings is external source of finance.
5. Debenture holder is the owner of the company.
Q.2. Explain the following terms and concepts: (Any 4) 8M
1. Corporate Finance 4. Bonus Shares
2. Financing decisions 5. Right Shares
3. Investment decisions 6. Owned capital
Q.3. Study the following case and express your opinion: 6M
1. A company is planning to enhance it's production capacity and is evaluating
the possibility of purchasing new machinery whose cost is ₹2 crore or has
alternative of machinery available on lease basis.
a. What type of asset is machinery?
b. Capital used for purchase of machinery is fixed capital or working capital?
c. Does the size of a business determine the fixed capital requirement?

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 LOTUS INSTITUTE
Unit test
Date: Sub: S.P Std: H.S.C Marks: 80 m Time: 3 Hrs
2. The management of ‘Maharashtra State Road Transport Corporation’, wants to
determine the size of working capital.
a. Being a public utility service provider, will it need less working capital or
more?
b. Being a public utility service provider, will it need more Fixed Capital?
c. Give one example of public utility service that you come across on day-to-day
basis.
Q.4. Distinguish between:(Any 3) 12M
1. Fixed capital and working capital
2. Equity shares and Preference shares
3. Shares and Debentures
4. Initial public offer and further public offer
Q.3. Answer in brief: (Any 2) 8M
1. Explain Importance of Corporate finance.
2. Explain features of equity shares
3. Explain factors affecting fixed capital
Q.4. Justify the following statement:(Any 2) 8M
1. Fixed capital stays in the business almost permanently.
2. The debentures are secured by charge on assets of the company.
3. A member of the public company can transfer shares.
4. The firm has a multiple choices of sources of financing.
Q.5. Attempt the following: (Any 2) 10M
1. Draft a letter to the Shareholder for issue of share certificate
2. Draft a letter to the Shareholder for issue of Bonus share
3. Draft a letter to the debenture holder regarding the allotment of debentures
Q.6. Answer the following: (Any 1) 8M
1. Explain in details types of Preference shares.
2. Explain in features of debentures in detail.

******************ALL THE BEST******************

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