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WorksheetsFixed and working capital
Total questions: 12
Worksheet time: 6mins
Capital Budgeting affects _____and _______of a business.
liquidity, profitability
Solvency, liquidity
profitability, solvency
Which of the following are current assets?
bills receivable
debtors
advance received from customers
cash in hand/at bank
Which of the following statements is not true with regard to use of fixed capital?
It affects the long term growth of the business
The business risk involved is low
Large amount of funds are involved
The investment decisions are irreversible
Which among the following is not a factor affecting fixed capital requirements?
Diversification
Business cycle
nature of business
Financial alternatives
_____represents investment in current assets required for day-to-day operations of the business.
Long-term capital
Working capital
Capital Budgeting
Medium-term capital
Net working capital is the excess of _______ over _______
fixed assets, current liabilities
current liabilities, current assets
Fixed assets, current assets
current assets, current liabilities
______ is the time span between the receipt of raw material and their conversion into finished goods.
working capital
operating cycle
payback period
production cycle
Purchasing a new machine to replace an existing one is an example of
Working capital
Financing decision
Dividend decision
Capital budgeting decision
Under which of the following circumstances the fixed capital requirement of a business is not likely to be high?
When the raw material is not easily available
Capital intensive techniques of production are used
The growth prospects of a company a high
When the financial alternatives are easily available
The working capital requirement of a business is not likely to be high when?
The nature of business is trading
It is difficult to procure raw material
Scale of operation of business is small
The rate of inflation is low
Under which of the following conditions the fixed capital requirements of a business is not likely to be low?
When the raw material is easily available
When the labour intensive production technique is used
When the level of collaboration is low
When the growth prospects of the firm are low
The working capital requirement of a business is not likely to be low when
The scale of the business operation is small
When the growth prospects of the business are low
When the raw material is easily available
When the rate of inflation is high
