Question : Questions : Business Finance and Its Meaning
Statement 1: Need for business finance arises due to risks and uncertainties associated with business operations.
Statement 2: Financial planning eliminates all uncertainties in business activities.
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. The need for business finance does arise due to risks and uncertainties associated with business operations. Businesses face various risks, including market volatility, competition, economic changes, and more. Managing these risks and uncertainties requires financial resources and strategies.
Statement 2 is false. Financial planning cannot eliminate all uncertainties in business activities. While financial planning helps in managing and mitigating risks to some extent, it cannot entirely eliminate uncertainties that are inherent to business operations. Financial planning aims to prepare and strategize for uncertainties rather than eliminating them.
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