FINANCIAL MANAGEMENT: CORE CONCEPTS
FINAL PAPER SOLVED QUESTIONS WITH
COMPLETE ANSWERS
◉ Who argued that the only social responsibility of business is to
increase its profits?
Answer: Milton Friedman.
◉ What is Stakeholder Capitalism?
Answer: A belief system that businesses should create value for all
stakeholders, not just shareholders.
◉ What has led to the rise of Stakeholder Capitalism?
Answer: The greater adoption of ESG investing.
◉ What are the benefits of focusing on stakeholders according to
recent studies?
Answer: Companies that focus on stakeholders tend to have higher
returns over the long run.
◉ What is the purpose of financial management in for-profit
organizations?
, Answer: To maximize profits and increase shareholder wealth.
◉ How do non-profit organizations use financial management?
Answer: To sustain operations and fulfill their vision.
◉ What is a Sole Proprietorship?
Answer: A business owned by a single individual who has full
control and is personally liable for all debts.
◉ What are two disadvantages of a Sole Proprietorship?
Answer: The owner is personally liable for all business debts, and
the business cannot survive the owner's death.
◉ What defines a Partnership?
Answer: A business formed by two or more persons who contribute
money, property, or labor with the intention of sharing profits.
◉ What is one advantage of a Partnership over a Sole
Proprietorship?
Answer: Partnerships have superior access to capital and talent due
to multiple owners.
◉ What is a disadvantage of a Partnership?
FINAL PAPER SOLVED QUESTIONS WITH
COMPLETE ANSWERS
◉ Who argued that the only social responsibility of business is to
increase its profits?
Answer: Milton Friedman.
◉ What is Stakeholder Capitalism?
Answer: A belief system that businesses should create value for all
stakeholders, not just shareholders.
◉ What has led to the rise of Stakeholder Capitalism?
Answer: The greater adoption of ESG investing.
◉ What are the benefits of focusing on stakeholders according to
recent studies?
Answer: Companies that focus on stakeholders tend to have higher
returns over the long run.
◉ What is the purpose of financial management in for-profit
organizations?
, Answer: To maximize profits and increase shareholder wealth.
◉ How do non-profit organizations use financial management?
Answer: To sustain operations and fulfill their vision.
◉ What is a Sole Proprietorship?
Answer: A business owned by a single individual who has full
control and is personally liable for all debts.
◉ What are two disadvantages of a Sole Proprietorship?
Answer: The owner is personally liable for all business debts, and
the business cannot survive the owner's death.
◉ What defines a Partnership?
Answer: A business formed by two or more persons who contribute
money, property, or labor with the intention of sharing profits.
◉ What is one advantage of a Partnership over a Sole
Proprietorship?
Answer: Partnerships have superior access to capital and talent due
to multiple owners.
◉ What is a disadvantage of a Partnership?
