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EXAMINATION
ED – 209 Financial Management
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MID-TERM EXAMINATION
Second Semester 2021-2022
UNEP MAED, Iriga City
Educ. 209 Financial Management
Vision
development.
Mission
UNEP Graduate School commits itself to produce globally competitive and value-
Goals
international standards.
the society.
professionals.
Insight:
My insight gained in VMG of UNEP Graduate Studies was that they want
to produce globally competitive graduate professionals who can are with various
provide professional and technical expertise relevant and responsive to the needs
problems we are encountering not only in our country but with other countries as
well. These will help us and also the other stakeholders enhance our capabilities
development.
For me, knowing this VMG of our school inspires and encourages me to
do so and prove to others that we can achieve those. With this, it will surely help
order to become a professional and technical expert someday and to help others in
1. Elaborately analyze and compare the different types of financial decisions and
determine which among the three (3) will maximize the firm’s wealth.
Investment Decisions are those which determine how scarce or limited resources
in terms of funds of the firms are committed to projects. It should also consider
the profitability of each individual project proposal that will contribute to the
Financing Decisions assert that the mix of debt and equity chosen to finance
investment should maximize the value of investment made. The finance decisions
should consider the cost of available in different forms and the risks attached to it.
If the cost of capital of each component is reduced, the overall weighted average
cost of capital and minimization of risks in financing will lead to the profitability
profits to be distributed to the owners, the frequency of such payments and the
retention of profits will have ultimate effect on the firm's wealth. If the firm,
however, adopts a very conservative dividend payments policy, the firm’s share
For me, these three decisions have the same basic objective, is to
maximize the firm’s wealth. If the firm enjoys the stability and growth, its share
prices in the market will improve and will lead to capital appreciation of
2. In Chapter 3, Fig 3-1 is presented that shows the financial manager’s role.
Describe each role of a finance manager that will lead in achieving the goals of
the firm.
The role of a finance manager that will lead in achieving the goals of the firm
are:
Analysis and Planning - are one of the fundamental activities and responsibility
for the finance department. A financial manager has to estimate the financial
needs of a business. How much money will be required for acquiring various
assets? The amount will be needed for purchasing fixed assets and meeting
working capital needs. He has to plan the funds needed in the future. How these
financial information. Financial analysis and planning are essential divided into
Acquisition of Funds - After making financial planning, the next step will be to
acquire funds. There are a number of sources available for supplying funds.
banks, etc.
wrong source for funds may create difficulties at a later stage. The pros and cons
funds. The funds should be spent on fixed assets and then an appropriate portion
important day-to-day activity for a finance manager. It spreads over both the
the management of current assets and current liabilities and keeps the gap
between the two managed as per the available funds with the organization. Cash
must ensure that all the branches, units, etc. have sufficient cash to address the
necessary expenses. The smoother the management of cash, the smoother is the
Projecting profit
Managing credit
Directing investments
Budgeting
Maximizing the value of the firm is the main goal of the financial manager. To
achieve this, one must instill the responsibilities to attain the financial objectives of
financing needs over a given period. This also refers to proper usage of the
profit generated by the firm. Profit arises due to many factors such as pricing,
industry competition, state of the economy, mechanism of demand and
supply, cost and output. A healthy mix of variable and fixed factors of
securities that provide high returns in relation to their risks. The funds should
be allocated in such a manner that they are optimally used. In order to allocate
funds in the best possible manner, pointers must be considered such as the size
of the firm and its growth capability, the status of assets whether they are
long-term or short-term, and the mode by which the funds are raised
Financing (raising money) - It is the obtaining the fund for the firm’s
operations and investments and seeking the best balance between the debt
(borrowed funds) and the equity (funds raised through the sale of ownership in
the business).
4. Discuss briefly and give your insights on the three (3) forms of a business
organization.
Sole Proprietorship
In a sole proprietorship, you’re the sole owner of the business. This type
unlimited personal liability, meaning you are fully responsible for any and all
debts and obligations of the business. Creditors can make a claim against any
Keep in mind the weight of the company will rest on your shoulders alone,
and there could be a lack of continuity for your business if you’re unavailable.
It’s also worth noting that it can be difficult to raise capital on your own (but
not impossible).
Insight:
individual with no distinction between the business and the owner. You are
entitled to all profits and are responsible for all your business's debts, losses
and liabilities.
Partnership
people. It’s fairly easy and inexpensive to form this type of business and start-
up costs are usually split equally between partners. A legal agreement should
Your personal liability is unlimited, but you’re also financially responsible for
are incurred without your knowledge, you’re still on the hook financially.
While you’ll have a partner (or partners) to help you manage the business,
it can be challenging to find the right person or people to work with, and
conflicts could create problems for the business. But if the partnership is right,
Insight:
In partnership, it might take more work, and it might take longer, but
economic development.
Corporation
offer flexible structure and an ability to divide ownership with shares, but that
makes them more complex, so it’s always a good idea to speak with a lawyer
before incorporating. This type of business may also more expensive to set up
than others.
level, but either way, corporations are closely regulated. You’ll need to keep
It’s worth noting that conflicts can occur between shareholders and
directors, which could impact the business and your involvement in it.
Insight:
A corporation is a legal entity that is separate and distinct from its owners.
Under the law, corporations possess many of the same rights and
money, sue and be sued, hire employees, own assets, and pay taxes.
5. In your own analysis, which among the three (3) forms of business organizations
will sustain in this time of COVID 19/pandemic? Justify your answer with
supporting basis.
individual with no distinction between the business and the owner. You are
entitled to all profits and are responsible for all your business's debts, losses
and liabilities. It has complete control and decision-making power over the
business.
recent restrictions can be a roadblock to your success. However, with the right
research and planning, any business can thrive even in the middle of a
pandemic:
Water-refilling station
Drinking water is one of the basic needs. All of us need safe drinking
water that can quench our thirst and refill our bodily fluids. However, not
all drinking water is made the same. Tap water isn’t 100% safe to drink
Rice business
country and everyone simply loves rice. Even in a pandemic, the demand
for rice is steady and growing. You have customers who will repeatedly
buy from your store and food establishments who order in bulk. You
E-commerce store
If you don’t want to have the costs of renting space, utilities, and other
you. An e-commerce store allows you to have a scalable business for your
COVID-19, people prefer someone to buy things for them outside and
businesses thrived. If you have a car, you can start your delivery service
Lazada.
Food business
When in doubt, go for food. After all, there will always be a demand
for food. People are always in search of good food that will satisfy their
cravings.