Finance Management Overview

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Questions and Answers

What is the primary goal of a firm according to the text?

To provide goods and services to the public
To maximize the profits of the firm
To maximize the wealth of its shareholders (correct)
To maximize the wealth of its stakeholders

What is the main reason firms exist according to the text?

To meet the needs of the local community
To provide employment opportunities
Because investors are willing to bear the risk (correct)
To generate revenue for the government

What is the definition of management according to the text?

The process of budgeting, saving, and forecasting financial activities
The process of raising funds and investing them to earn a profit
The process of managing a firm's finances, including investing, borrowing, and lending
The process of planning, organizing, directing and controlling activities to meet objectives (correct)

What is the definition of finance according to the text?

The art and science of managing money, including activities like investing, borrowing, lending, budgeting, saving, and forecasting (A) Signup and view all the answers

What are stakeholders according to the text?

Individuals who have an economic interest in the firm, but are not owners (A) Signup and view all the answers

What is the main difference between finance at a personal level and finance in a business context according to the text?

Personal finance is concerned with individual decisions, while business finance is concerned with firm-level decisions (A) Signup and view all the answers