Intro to Business Finance (S1W1)

Finance can best be defined as:

• The study of customer behaviour in a market

• The management of funds in acquiring, allocating, and utilizing resources

• The process of manufacturing goods for sale

• The legal framework that governs company operations

Which of the following BEST explains the importance of finance in a business?

• It guarantees business success without risks

• It ensures funds are planned, raised, allocated, and controlled efficiently

• It focuses only on dividend payments to shareholders

• It only deals with recording daily transactions

One major role of financial management is financial planning. Which of the following is an example of this role?

• Deciding whether to pay dividends or reinvest profits

• Estimating the funds required for the next financial year

• Recording daily sales in the accounting system

• Determining the price of a company’s products

Which situation BEST represents the role of financial management in acquiring capital?

• MR D.I.Y. launching a new product line

• Maybank paying dividends to its shareholders

• TNB issuing bonds to finance power plant expansion

• Petronas reducing employee working hours

Financial control as a role of financial management involves:

• Monitoring budgets to ensure funds are used effectively

• Deciding whether to expand into a new market

• Determining how much profit to distribute as dividends

• Selecting between debt and equity financing