Part 3

Question 1

Finance involves the use of human judgment. Therefore, it is an art or a science?

Answer 1

Art

Question 2

Since practical problems of finance are solved using skill and experience, finance is an Art. True/False

Answer 2

True

Question 3

Finance uses mathematical and statistical equations and tools, hence it is a ……………. (Choose science/art)

Answer 3

Science

Question 4

When techniques are used for ……………. purposes, it is science and when the choice is ……………. of the results it is an art. (Choose analytical/application)

Answer 4

When techniques are used for analytical purposes, it is science and when the choice is application of the results it is an art.

Question 5

Define Financial Management as put forth by J L Massie

Answer 5

Financial Management is the operational activity of a business that is responsible for obtaining and effectively utilizing the funds necessary for efficient operations.

Question 6

What the 4 key issues businesses face?

Answer 6

1. Raising cost-effective, low-risk funds
2. Investment of funds into scarce resources in order to maximize returns
3. Managing day to day production and distribution functions effectively
4. How much of the profits should be retained in the business and how much should be distributed.

Question 7

Finance Function comprises of

a) Safe custody of funds only
b) Expenditure of funds only
c) Procurement of finance only
d) Procurement & effective use of funds

Answer 7

d) Procurement & effective use of funds