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SAI INTERNATIONAL SCHOOL

                                                       Class-12
                                                                   th
                                                  Business studies

                                     Chapter – 9, Financial Management

                              Topics: Fixed capital, Importance and factors.
                                                     (Lesson - 34)





               Q.1 In order to raise an additional capital of Rs.50 lacs, Yudhister Limited has used
               debt because

               (a) Increased use of debt lowers the overall cost of capital

               (b) Decrease in use of debt lowers overall cost of capital


               (c) Increase in use of debt increases the overall cost of capital

               (d) None of the above


               Q.2 which of the following statements is not true with regard to use of fixed
               capital?

               (a) It affects the long term growth of the business.


               (b) Large amount of funds are involved.

               (c) The business risk involved is low.

               (d) The investment decisions are irreversible.


               Q.3. Under which of the following conditions the fixed capital requirements of a
               business is not likely to below?

               (a) When the raw material is easily available


               (b) When the labour intensive production technique is used

               (c) When the level of collaboration is low

               (d) When the growth prospects of the firm are low
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