Chapter 1

Question 1

is an area of financial decision-making harmonizing individual motives and enterprise goals.

Answer 1

Financial Management

Question 2

It is mainly concerned with the effective fund management in business.

Answer 2

Financial Management

Question 3

deals with the procurement of funds and their effective utilization in the business as an application of general managerial principles in financial decision-making.

Answer 3

Financial Management

Question 4

the art and science of managing money

Answer 4

Finance

Question 5

study of how to make good decisions that involve money.

Answer 5

finance

Question 6

Functions of finance

Answer 6

Analysis
Decision Making

Question 7

how a firm should make good financial decisions

Answer 7

Corporate Finance

Question 8

how an individual should make good financial decisions

Answer 8

Personal Finance

Question 9

How we should make good decisions involving financial investments

Answer 9

Investments and Portfolio Management

Question 10

It is about how the financial markets should be organized and how financial institutions should be managed in such a way that they provide the most benefit to the economy

Answer 10

Financial Markets and institutions

Question 11

What are the areas of finance

Answer 11

Corporate Finance
Personal Finance
Investment and Portfolio Management
Financial Markets and Institutions
Public Finance

Question 12

it is about taxes, spending, balancing the budget, and financing public debt

Answer 12

Public Finance

Question 13

Importance of financial Management

Answer 13

Improve profitability
Increase the value of the firm
Promoting savings
Financial planning
Acquisition of funds
Proper use of funds
Financial decision

Question 14

is one of the emerging areas which provides immense opportunity to finance and economical areas

Answer 14

Economics

Question 15

records the financial information of the business

Answer 15

Accounting

Question 16

modern approaches of the financial management applied large number of mathematical and statistical tools and techniques. They are also called as

Answer 16

Econometrics

Question 17

It is the operational part of the business which helps to multiply the money into profit

Answer 17

Production Management

Question 18

produced goods are sold in the market with innovative and modern approaches.

Answer 18

Marketing

Question 19

Financial management is also related to human resource department which provides manpower to all the functional areas of the management

Answer 19

Human Resources

Question 20

Scope of financial management

Answer 20

Economics
Accounting
Mathematics
Production Management
Marketing
Human Resources

Question 21

Functional Areas of modern financial Management

Answer 21

Determining financial needs
Choosing the sources of funds
financial analysis and interpretation
Cost-volume-profit analysis
working capital management
Dividend Policy
Capital Budgeting

Question 22

Financial manager should determine the financial needs of the business

Answer 22

Determining financial needs

Question 23

institution that can provide long-term funds

Answer 23

Choosing the sources of funds

Question 24

profitability, liquidity, short-term and long-term financial position of the business

Answer 24

Financial analysis and interpretation

Question 25

Fixed costs, variable costs, and semi-variable costs have to be analyzed

Answer 25

Cost-volume-profit analysis

Question 26

part of the firm’s capital which is required for financing short-term assets such as cash, receivables, and inventories.

Answer 26

Working Capital Management

Question 27

Estimating the financial viability of capital investment over the life of the investment

Answer 27

Capital Budgeting

Question 28

Organization of the finance functions

Answer 28

Investment Decision
Financing Decision
Dividend Decision

Question 29

it relates to the selection of assets in which funds are invested by the firm

Answer 29

Investment Decision

Question 30

two categories of investment decisions

Answer 30

Long term assets
short term assets

Question 31

yield a return over a period of time in the future

Answer 31

Long term assets

Question 32

convertible into cash in the normal course of business, usually within a year.

Answer 32

Short term assets

Question 33

decisions as to how to raise the funds to pay for investment in assets. It determines the best financial mix of the firm.

Answer 33

Financing Decisions

Question 34

two types of financing decisions

Answer 34

Capital Structure theory
Capital structure decisions

Question 35

decisions as to how much, how frequently, and in what form to return cash to owners

Answer 35

Dividend decisions

Question 36

Objectives of financial Market

Answer 36

Profit maximization
Wealth Maximization

Question 37

It aims at maximizing the profit of the business

Answer 37

Profit Maximization

Question 38

one of the modern approaches that involves the latest innovations and improvements in the business.

Answer 38

Wealth Maximization

Question 39

It is also known as value maximization or net present worth maximization

Answer 39

Wealth Maximization

Question 40

is forward-looking and based on cash flows

Answer 40

Financial Management

Question 41

historic in nature and focuses on profit rather than cash

Answer 41

Financial Accounting

Question 42

concerned with raising funds and providing a return to investors

Answer 42

Financial Management

Question 43

primarily concerned with the provision of information for management to assist it in making decisions within the company.

Answer 43

Management Accounting