Which of the following are the applications of funds? 1. Redemption of preference share capital 2. Payment of dividend 3. Increase in working capital A. Only 1 and 2 B. Only 2 and 3 C. Only 1 and 3 D. All of the above

The correct answer is D. All of the above.

Application of funds is the use of funds for a specific purpose. The three options given in the question are all applications of funds.

• Redemption of preference share capital is the process of repaying the principal amount of preference shares.
• Payment of dividend is the distribution of profits to shareholders.
• Increase in working capital is the increase in the amount of money that a company needs to operate its business.

All of these are applications of funds because they involve the use of money for a specific purpose.