Question : Questions : Business Finance and Its Meaning
Statement 1: Financial planning ensures efficient allocation of available funds.
Statement 2: Financial planning is only concerned with short-term goals.
Option 1: Statement 1 is true, and statement 2 is false.
Option 2: Statement 1 is false, and statement 2 is true.
Option 3: Both statements 1 and 2 are true.
Option 4: Both statements 1 and 2 are false.
Correct Answer:
Statement 1 is true, and statement 2 is false.
Solution : The correct answer is (a) Statement 1 is true, and statement 2 is false.
Statement 1 is true. Financial planning involves the process of determining the most efficient and effective way to use available financial resources to achieve the goals and objectives of an individual or organization. It involves budgeting, investment planning, risk management, and other strategies to optimize the use of funds.
Statement 2 is false. Financial planning is not only concerned with short-term goals. It encompasses both short-term and long-term financial goals, considering the entire financial landscape and various timeframes. It involves planning for immediate needs as well as future financial stability and growth.
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