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Q3:- Briefly explain the investment decision and factors affecting it.
Ans- It refers to the selection of assets in which funds will be invested by the business that is long
term assets and short term assets.
Factors affecting investment decision
1. Cash flow of the project
2. The rate of return
3. The investment criteria involved
Q4: Briefly explain dividend decision and factors affecting it.
Ans. Dividend decision determines that how much part of the earning should be distributed among
share holders and how much should be retained with business.
FACTORS AFFECTING DIVIDEND DECISION :
1. Amount of profit earned
2. Stability of earnings
3. Policy of maintaining stability of dividend
4. Growth opportunities
5. Cash Flow position
6. Shareholders preference.
1. It enables a company to tackle the uncertainty in respect of the availability and timing of
the funds.
2. It tries to forecast what may happen in future under different business situations.
3. It helps in avoiding business shocks and surprises and helps in preparing a blueprint of
an
organisations future preparations relating to finance.
4. It provides a link between investment and financing decisions on a continuous basis.
Q5. Explain the meaning of fixed capital? Briefly explain any four factors that determines
the fixed capital of the company?
Ans. Fixed capital is the capital which is used for the purchase of the fixed assets.
FACTORS TO BE CONSIDERED WHILE DETERMINING FIXED CAPITAL :
1. Nature of Business
2. Scale of Operations
3. Choice of Technique
4. Technology Upgradation
5. Growth Prospects
6. Diversification
Q6. What is meant by working capital? Briefly explain any four factors that determines the
working capital of the company?
Ans.It is the difference between current assets and current liabilities or the investments
that helps in the smooth day to day operations.
FACTORS DETERMINING THE WORKING CAPITAL REQUIREMENT :
1. Scale of Operations
2. Business Cycle
3. Production Cycle
4. Credit allowed
5. Credit Availed of the business.
Q7. :- What is meant by capital structure? Explain different factors affecting the capital
structure of a company?
Ans.Capital Structure refers to relative proportion of different sources of long term finance.
FACTORS AFFECTING CAPITAL STRUCTURE :
1. Cash Flow Position
2. Return on Investment
3. Financial Risk of the organization
4. The expected rate of return of lenders on debt capital (Cot of debt)
5. The expected rate of return on equity capital (Cost of Equity)
Q1:- What is meant by financial market ? Explain any two function of financial
market?
Ans. Financial market creates and exchanges financial securities.
Functions of Financial markets:
(a) Mobilisation of savings and their channellisation into more productive uses.
(b) Facilitates price discovery.
Q2:- What is money market. Explain different instruments used in money market?
Ans. It is the market where transactions in short term securities are made.
Instruments used in money market are;
(a) Treasury bill
(b) Commercial papers
(c) Call money
(d) Certificates of deposites.
Q3:- Define capital market. State the two parts of capital market?
Ans. It is the market where transactions in long term securities are made.
Two types of Capital market are(a) Primary market
(b) Secondary market
Q4:- What is the difference between primary market and secondary market?
Ans. Explain the difference between primary market and secondary market on the basis of
issue, buying and selling of securities and place.
Q5:- What is the full form of SEBI?
Ana. Securities and Exchange Board of India.
Q7. What is brand name? State any three factors of good brand name?
Ans. It refers to the part of a brand which can be spoken.
Factors of a good brand name:
a) Simple and short.
b) Easily pronounceable.
c) Suggestive.
d) Distinctive.
Q8. Explain any three functions of packaging?
Ans. a) Describe the product and specify its content.
b) Identification of the product or brand.
c) Grading of product.
Q11:- what is meant by channels of distribution ? Explain the types of the channels of
destructions?
Ans. It refers to that path through which products reach consumers.
Types of levels of channels of distribution:
a) Direct channel.
b) Indirect channel:
i) One level channel
ii) Two level channel
iii) Three level channel
Q12:- Define advertising . Explain the importance of advertising in marketing management ?
Ans. It refers to paid and non personal communication to a target market from an identified
sponsor using communication channels.
Importance of advertising:
To manufactures:
a) Enhancing consumer satisfaction and confidence.
b) Helpful in increasing the demand of their product.
c) Helpful in facing competition.
To society:
a) Helpful in generating more employment.
b) Helpful in improving the standard of living.
To consumers:
a) No fear of exploitation.
b) Knowledge of various products.
Q15:- advertising mislead costumers and increases the cost of products ? Do you agree
with this statement ? give reasons to support your answer?
Ans. Objections to advertisements:
a) Adds to cost.
b) Undermines social values.
c) Confuses the buyers.
d) Encourages sale of inferior products.
e) Some advertisements are in bad taste.
Q16. Define personal selling ?
Ans. Personal selling refers to contracting prospective buyers of product personally.
Q17 Enumerate any good qualities of a good salesman?
Ans. Qualities of a good salesman:
a) Physical qualities.
b) Psychological qualities.
c) Technical qualities.
d) Good communication skills.
Q19. Define public relations.
Ans. Public relations refers to a variety of programmes (news, events, publications,
sponsorships) to promote and protect the image of a company and its products.
Q18. What is meant by Sales Promotion? Give any four techniques of sales promotion.
Ans. Sales promotions are those activities which are undertaken to increase sales besides
advertising personal selling and publicity.
Techniques of sales promotion:
a) Rebate.
b) Discount.
c) Refund.
d) Product combination.
e) Quantity gift.
Q19. What are the roles of public relations?
Ans. Role of Public Relations :
1. Smooth functioning of business and achievement of objectives
2. Building corporate image that affects favourably on its products.
3. Build interest in the established product and help in launching a new product
Q20. Introducing a scheme of 50%+40% less by a company is an example of which sales
promotion technique?
Ans. Discount.
Q4:- Explain the rights provided to the consumers by the consumer protection act?
Ans. 1. Right to Safety : It is the right to safety against such goods and services as are
hazardous to health, life and property of the consumer.
2. Right to be Informed : Consumer has also the right that he should be provided all the
information on the basis of which he decides to buy goods or
services. Such information relate to quality, purity, potency,
standard, date of manufacture, method of use, etc. of the
commodity.
3. Right to Choose : Consumer has the full right to buy any good or service of his choice
from among the different goods or services available in the market.
4. Right to be Heard : Consumer has the right that his complaint be heard. Under this right,
the consumer can file a complaint against all those things which are
prejudicial to his interest.
5. Right to Consumer Education : It refers to educate the consumer constantly with regard
to their rights. In other words, consumers must be aware of
the rights they enjoy against the loss they suffer on account
of goods and services purchased by them.
6. Right to Healthy Environment : This right provides consumers, the protection against
environmental pollution so that the quality of life is
enhanced.