MISAMIS OCCIDENTAL NATIONAL HIGH SCHOOL

SHS DEPARTMENT
BUSINESS FINANCE
MODULE 1
Summative # 1

Name:__________________________________
Grade & Section:_________________________ Date: _______________

Check for Understanding: Read and understand the questions. Answer it briefly and concisely. Write
your answer on a separate sheet of paper.
A. Let us recall.
Write your answer on a separate sheet of paper.

1. Define Finance.
2. Who are responsible for financial management within an organization?
3. What are the primary activities of the financial manager?
4. What are the roles of financial institutions and capital market?
5. What are capital markets?

B. Critical Thinking
Write your answer on a separate sheet of paper.

1. How does the financial manager help in achieving the goal of the organization?
2. What are the important financial decisions? Explain and give examples.
3. Explain the role of a finance manager of a business entity.
4. What do you understand by term “Capital Markets?”
5. Why has the finance function become so prominent in business entity?

C. True-False Test
State whether the following statements are True (T) or False (F).

________1. The main objective of financial management is profit maximization.

________2.Profit maximization and wealth maximization mean the same.
________3. The finance manager of a firm closely interacts with all other departments to
improve the financial decision-making.
________4. The goals of managers and shareholders are always the same.
________5.Financial managers of today have fewer responsibilities than their counterparts in
the early 20th century.
________6.Rapid technological change and word wide economic uncertainty are factors that
may affect the job of the financial manager.
________7.A goal or objective is a necessary first step for effective financial management.
 ________8.Deciding on the total amount of assets needed by the firm is a key step in the
invested decision.
________9.The goal of the firm should be to maximize earnings per share.

________10. In a large corporation, the firm’s owners are usually also its top managers.
________11. Corporate management, acting as the owner’s agent, makes all decisions in the
owners’ best interests.
________12. Maximizing the price of a share of the firm’s common stock is the equivalent of
maximizing the wealth of the firm’s present owners.
________13. Corporate Social Responsibility (CSR) is usually in conflict with the objective of
shareholder wealth maximization.
________14. The price of a share of common stock acts as a barometer indicating how well
management is doing on behalf of shareholders.

D. Multiple Choice: Select the best answer. Encircle the correct answer.
1. The main aim of financial management is to increase___________.
A. Sale revenue C. Shareholders’ wealth
B. Market share D. Profit

2. Which of the following is part of financial decision-making?

A. Financial Institutions C. Investment Decisions
B. Dividend Decisions D. all of the given

3. One right goal for managers is to ________.

A. maximize their own remuneration and perks
B. improve working condition of employees
C. maximize shareholder’s wealth
D. increase the market share

4. The main types of business firms include

I. sole proprietorship
II. corporation
III. Partnership
A. I only C. III only
B. II only D. I, II, and III

5. Stakeholders of a firm include _______________.

I. sole proprietorship
II. corporation
III. Partnership
A. I only C. III only
B. II only D. I, II, and III
6. Which is concerned with allocating, raising, and controlling of the funds of the firm.
A. Finance C. Financial Management
B. Budgeting D. Accounting

7. Which is an efficient allocation of funds to specific assets?

A. Financing C. Dividend
B. Asset D. Investing

8. The finance manager is responsible in maximizing the value of the utility owned by ________.
A. creditors C. board of directors
B. investors D. banks

9. Who is the one responsible in making investment, financial, and dividend policy-making
decisions of a firm?
A. Creditors C. Employees
B. Finance manager D. Supplier

10. Which is one of the ultimate goals of the finance manager?

A. Maximize market price of shares of stock
B. Maximize liabilities
C. Maximize profit
D. Maximize asset