NCERT Solutions for Class 11 Business Studies – Chapter 8 – Sources of Business Finance
NCERT Solutions for Class 11 Business Studies Chapter 8 has answers to all the textbook questions given at the end of this chapter. Since solving questions given at the end of chapters of NCERT textbooks is an essential part of a student’s preparation, these resources can be very helpful. To get the best out of these resources, students should first go through the NCERT book and then , attempt the questions given at the end on their own, and then cross check using the solutions prepared by Extramarks subject experts. These are also of great help for last-minute preparations and revisions especially for students who study on their own.
Class 11 NCERT Solutions Business Studies – Chapter 8
Access NCERT Solutions for Class 11 Business Studies Chapter 8 – Sources of Business Finance
NCERT Solutions for Class 11 Business Studies Chapter 8 Sources of Business Finance
Finance is one of the most important topics covered in Business Studies. A business, at the end of the day, must be able to raise money for the investments and projects that it wants to undertake. In this Chapter, students will learn about the various sources of finance for an organisation including equity and debt, the merits and demerits of all these sources, and what factors do businesses need to consider when raising capital through a specific source of finance.
Objectives of Learning The Chapter 8 Business Studies Class 11
After going through Chapter 8 of NCERT Business Studies Class 11 textbook, students should be able to do the following:
- Give a definition of business finance, as well as its nature and relevance.
- Classify the various sources of business capital and evaluate their benefits and drawbacks.
- Students should also be able to recognise international financial sources.
- Discuss the elements that influence the selection of a suitable source of funding.
Students can leverage NCERT Solutions for Class 11 Business Studies Chapter 8 by Extramarks in order to get a better understanding of these topics and how they can frame solutions to questions asked from these topics.
Concepts covered in this chapter
- Introduction
- Meaning, nature and significance of business finance
- Classification of sources of funds
- Period basis
- Source of generation basis
- Sources of finance
- Retained earnings
- Trade credit
- Factoring
- Lease financing
- Public deposits
- The Lessees
Role of Extramarks in The Success of Students
Extramarks believes in in-depth learning and comprehension in a world of stiff competition. Students will be confident in the subjects they’ve studied if they learn by understanding the concepts completely. Another important factor in every subject requires tremendous practice to master the topic.
Students will notice that each chapter concludes with some exercise questions. Fill-in-the-blanks, true or false, one-word replies, and descriptive inquiries are some examples. Students must be thorough when answering these questions because some of them can be tricky and may appear on the CBSE board exam question paper.
Here at Extramarks, the CBSE curriculum is taken into consideration when creating NCERT Solutions by the subject experts. They provide students with in-depth understanding of each subject, topic, and concept, allowing them to learn more effectively. Direct and indirect questions from NCERT books and NCERT Solutions are also included in the CBSE board exam question paper.
Related Questions
- State the advantages of the issues of debentures provided over the issue of equity shares?
Debentures are unsecured debt instruments that allow companies to raise long-term capital for investments and projects at a fixed rate of interest. Since they are a kind of debt instrument, they do not involve any dilution of the ownership of the company. On the other hand, raising capital through issue of equity shares involves selling part ownership in the company to other investors, which means dilution of shareholder’s equity.
Also, since the interest payment on debentures is tax deductible, the cost of issuing debentures is much lower than that of issuing equity shares.
- What are the merits and demerits of public deposits?
Public deposits are a source of business finance wherein companies invite the general public to deposit their savings with them. In return, the company pays a fixed rate of interest on those deposits, which is usually higher than that provided by commercial banks.
The merits of public deposits are as follows:
- The procedure of obtaining public deposits is a lot simpler than most of the other sources of finance
- Cost of public deposits is generally lower than the cost of borrowing funds from banks
- They do not lead to any dilution of the company’s equity
The demerits of public deposits are as follows:
- For a company to be able to raise funds through public deposits, it must have a good market reputation for the people to trust it with their money. For this reason, new companies find it difficult to raise funds through this source
- Collection of public deposits can be challenging especially when the amount of money to be raised is high