Fall Semester 2026 UNISA Assignment: Financial Management
(FIN3701) – Complete Solved Assignment with Step-by-Step
Answers, Marking-Guideline Alignment & Exam-Focused Study
Guide (Updated 2026 Edition)
,Question 1: What is the primary goal of financial management?
• A) Maximizing sales
• B) Maximizing profit
• C) Maximizing shareholder wealth
• D) Minimizing costs
Correct Option: C) Maximizing shareholder wealth
Rationale: The primary goal of financial management is to maximize the value of the
firm for its shareholders, ensuring long-term profitability and growth.
Question 2: Which of the following is considered a liquidity ratio?
• A) Debt to equity ratio
• B) Current ratio
• C) Return on equity
• D) Gross profit margin
Correct Option: B) Current ratio
Rationale: The current ratio measures a company's ability to pay off its short-term
liabilities with its short-term assets, making it a key liquidity ratio.
Question 3: What does the term 'capital budgeting' refer to?
• A) The process of managing day-to-day finances
• B) The process of planning and managing investments in long-term assets
• C) The method of evaluating cash flows
• D) The study of tax implications
Correct Option: B) The process of planning and managing investments in long-term
assets
Rationale: Capital budgeting is crucial for determining which long-term investments or
projects are worth pursuing, ensuring optimal allocation of resources.
Question 4: What does the Weighted Average Cost of Capital (WACC) represent?
• A) The return rate required by shareholders
• B) The average rate of return a company is expected to pay to its security
holders
• C) The total cost of equity
• D) The cost of debt only
, Correct Option: B) The average rate of return a company is expected to pay to its
security holders
Rationale: WACC is a crucial measure that reflects the overall cost of capital for a firm
and is vital for making investment decisions.
Question 5: Which of the following best describes 'risk management' in finance?
• A) Eliminating all financial risks
• B) Identifying, assessing, and prioritizing risks followed by coordinated
efforts to minimize, monitor, and control the probability of unfortunate
events
• C) Avoiding investments
• D) Increasing company profits
Correct Option: B) Identifying, assessing, and prioritizing risks followed by coordinated
efforts to minimize, monitor, and control the probability of unfortunate events
Rationale: Effective risk management is essential for maintaining the stability and
sustainability of a financial organization.
Question 6: Which financial statement provides a snapshot of a company's
financial position at a specific point in time?
• A) Cash flow statement
• B) Income statement
• C) Balance sheet
• D) Statement of changes in equity
Correct Option: C) Balance sheet
Rationale: The balance sheet shows what a company owns and owes at a particular
moment, detailing assets, liabilities, and equity.
Question 7: Which of the following is an example of a fixed cost?
• A) Wages
• B) Rent
• C) Raw materials
• D) Utilities
Correct Option: B) Rent
Rationale: Fixed costs remain constant regardless of production levels, while other
costs fluctuate with production volume.
Question 8: What does EBITDA stand for?
• A) Earnings Before Interest, Taxes, Depreciation, and Amortization
(FIN3701) – Complete Solved Assignment with Step-by-Step
Answers, Marking-Guideline Alignment & Exam-Focused Study
Guide (Updated 2026 Edition)
,Question 1: What is the primary goal of financial management?
• A) Maximizing sales
• B) Maximizing profit
• C) Maximizing shareholder wealth
• D) Minimizing costs
Correct Option: C) Maximizing shareholder wealth
Rationale: The primary goal of financial management is to maximize the value of the
firm for its shareholders, ensuring long-term profitability and growth.
Question 2: Which of the following is considered a liquidity ratio?
• A) Debt to equity ratio
• B) Current ratio
• C) Return on equity
• D) Gross profit margin
Correct Option: B) Current ratio
Rationale: The current ratio measures a company's ability to pay off its short-term
liabilities with its short-term assets, making it a key liquidity ratio.
Question 3: What does the term 'capital budgeting' refer to?
• A) The process of managing day-to-day finances
• B) The process of planning and managing investments in long-term assets
• C) The method of evaluating cash flows
• D) The study of tax implications
Correct Option: B) The process of planning and managing investments in long-term
assets
Rationale: Capital budgeting is crucial for determining which long-term investments or
projects are worth pursuing, ensuring optimal allocation of resources.
Question 4: What does the Weighted Average Cost of Capital (WACC) represent?
• A) The return rate required by shareholders
• B) The average rate of return a company is expected to pay to its security
holders
• C) The total cost of equity
• D) The cost of debt only
, Correct Option: B) The average rate of return a company is expected to pay to its
security holders
Rationale: WACC is a crucial measure that reflects the overall cost of capital for a firm
and is vital for making investment decisions.
Question 5: Which of the following best describes 'risk management' in finance?
• A) Eliminating all financial risks
• B) Identifying, assessing, and prioritizing risks followed by coordinated
efforts to minimize, monitor, and control the probability of unfortunate
events
• C) Avoiding investments
• D) Increasing company profits
Correct Option: B) Identifying, assessing, and prioritizing risks followed by coordinated
efforts to minimize, monitor, and control the probability of unfortunate events
Rationale: Effective risk management is essential for maintaining the stability and
sustainability of a financial organization.
Question 6: Which financial statement provides a snapshot of a company's
financial position at a specific point in time?
• A) Cash flow statement
• B) Income statement
• C) Balance sheet
• D) Statement of changes in equity
Correct Option: C) Balance sheet
Rationale: The balance sheet shows what a company owns and owes at a particular
moment, detailing assets, liabilities, and equity.
Question 7: Which of the following is an example of a fixed cost?
• A) Wages
• B) Rent
• C) Raw materials
• D) Utilities
Correct Option: B) Rent
Rationale: Fixed costs remain constant regardless of production levels, while other
costs fluctuate with production volume.
Question 8: What does EBITDA stand for?
• A) Earnings Before Interest, Taxes, Depreciation, and Amortization
