Which of the following assumes paramount importance for investing surplus cash by a firm?

Yield

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Liquidity

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Tax Shelter

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Security

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Maturity

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Solution

The correct option is D Security
Security is the assurance of getting back the original amount and it assumes paramount importance for investing surplus cash by a firm.

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Similar questions

Q. From the following particulars, calculate Cash Flow from Investing Activities


Particulars	Purchased (₹)	Sold (₹)
Machinery	6,20,000	2,00,000
Investments	2,40,000	80,000
Goodwill	1,00,000	...
Patents	...	1,50,000

Additional Information:

1. Interest received on debentures held as investment ₹ 8,000.

2. Interest paid on debentures issued ₹ 20,000.

3. Dividend received on shares held as investment ₹ 20,000.

4. Dividend paid on Equity Share Capital ₹ 30,000.

5. A plot of land was purchased out of the surplus funds for investment purposes and was let out for commercial use. Rent received ₹ 50,000 during the year.

Q. Which of the following would not be considered a non-cash investing and financing activity in preparing a statement of cash flows?

Q. Calculate Cash Flow from Investing Activities from the following information:

Particular	31^st March, 2019 (₹)	31^st March, 2018 (₹)
Investment in Land	3,00,000	3,00,000
Shares in Damodar Ltd.	1,50,000	1,50,000
12% Long-term Investments	80,000	50,000
Plant and Machinery	7,50,000	6,00,000
Patents	70,000	1,00,000
Goodwill	1,50,000	1,00,000

Additional Information:
1. A piece of land was purchased as an investment out of surplus. It was let out for commercial purpose and the rent received was ₹ 20,000.
2. Dividend received from Damodar Ltd. @ 12%.
3. Patents written off to the extent of ₹ 20,000. Some patents were sold at a profit of ₹ 10,000.
4. A machine costing ₹ 80,000 (depreciation provided thereon ₹ 30,000) was sold for ₹ 35,000. Depreciation charged during the year was ₹ 70,000.
5. During the year 12% investments were purchased for ₹ 1,00,000 and some investments were sold at a profit of ₹ 10,000. Interest on investments for the year was duly received.

Q. From the following information, calculate Cash Flow from Investing Activities:

	₹		₹
Purchase of Machine	2,50,000	Purchase of Investments	1,60,000
Purchase of Goodwill	1,00,000	Sale of Patents	40,000
Sale of Machine	35,000	Interest and Dividend Received	10,000
Sale of Investment	50,000

A building was purchased as investment out of surplus which was let out for commercial purposes.
Rent Received ₹20,000.

Q. Which year saw the highest percentage decrease in the cash surplus?

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Which of the following assumes paramount importance for investing surplus cash by a firm?

The correct option is D SecuritySecurity is the assurance of getting back the original amount and it assumes paramount importance for investing surplus cash by a firm.

The correct option is D Security
Security is the assurance of getting back the original amount and it assumes paramount importance for investing surplus cash by a firm.