Question:
The process of estimating the fund requirements of a business and specifying the sources of funds is called 0.15mm.
The process of estimating the fund requirements of a business and specifying the sources of funds is called 0.15mm.
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• Financial Planning estimates the amount of funds required in advance.
• It identifies suitable sources of finance for raising those funds.
• Good financial planning helps maintain liquidity, solvency and financial stability.
• It identifies suitable sources of finance for raising those funds.
• Good financial planning helps maintain liquidity, solvency and financial stability.
Updated On: Jul 18, 2026
- Trading on Equity
- Capital Budgeting Decision
- Financial Management
- Financial Planning
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The Correct Option is D
Solution and Explanation
Concept:
• Financial Planning is the process of estimating the financial requirements of a business and deciding the most suitable sources from which these funds will be raised.
• It ensures that adequate funds are available at the right time and in the right amount for smooth business operations.
Step 1: Understand the meaning of Financial Planning Financial planning mainly involves:
• Estimating the amount of funds required by the business.
• Determining the appropriate sources from which these funds will be obtained.
Step 2: Examine the given options Option (A): Trading on Equity refers to using fixed-cost funds (such as debt) to increase the return to equity shareholders. Option (B): Capital Budgeting Decision relates to decisions regarding investment in long-term assets. Option (C): Financial Management is a broader concept that includes planning, organizing, directing and controlling all financial activities of the business. Option (D): Financial Planning exactly refers to estimating fund requirements and deciding their sources.
Step 3: Choose the correct answer Since the question specifically mentions estimating the fund requirements and specifying the sources of funds, the correct answer is: \[ \boxed{\text{Financial Planning}} \]
• Financial Planning is the process of estimating the financial requirements of a business and deciding the most suitable sources from which these funds will be raised.
• It ensures that adequate funds are available at the right time and in the right amount for smooth business operations.
Step 1: Understand the meaning of Financial Planning Financial planning mainly involves:
• Estimating the amount of funds required by the business.
• Determining the appropriate sources from which these funds will be obtained.
Step 2: Examine the given options Option (A): Trading on Equity refers to using fixed-cost funds (such as debt) to increase the return to equity shareholders. Option (B): Capital Budgeting Decision relates to decisions regarding investment in long-term assets. Option (C): Financial Management is a broader concept that includes planning, organizing, directing and controlling all financial activities of the business. Option (D): Financial Planning exactly refers to estimating fund requirements and deciding their sources.
Step 3: Choose the correct answer Since the question specifically mentions estimating the fund requirements and specifying the sources of funds, the correct answer is: \[ \boxed{\text{Financial Planning}} \]
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