The process of estimating the fund requirements of a business and specifying the sources of funds is called 0.15mm.

Question

‘Leno' is a reputed car manufacturing company, which is going to complete its 75 years in October 2024. The Chief Executive Officer of the company decided to take the company to a higher level. For this, he called a meeting of all departmental heads of the company. In the meeting, the Chief Executive Officer proposed a target to increase sales by 10 and profits by 20 in its Platinum Jubilee year.
The Human Resource Manager estimated that an increase of 500 workers would be required to achieve the target. The Finance Manager suggested that the company must hold adequate cash balances for various purposes, and he will prepare a statement showing the cash inflows and outflows for this particular period. Identify and explain two types of plans discussed in the above case.

Answer 1

Step 1: Break down the definition given.
It talks about estimating fund requirements and specifying the sources from which those funds will come.
Step 2: Recall what financial planning means.
Financial planning is exactly this, estimating how much money a business needs and deciding the best sources to raise it from, so funds are available at the right time in the right amount.
Step 3: Rule out the other terms.
Trading on equity is about using debt to boost equity returns, capital budgeting is about long term investment decisions, and financial management is the broader umbrella term, none of which describe this specific estimating and sourcing process as precisely.
Final answer: Option 4, Financial Planning.

The process of estimating the fund requirements of a business and specifying the sources of funds is called 0.15mm.

Show Hint

The Correct Option is D

Solution and Explanation

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