$(2$ marks$)$ Question $1($Introduction to Financial Management$)$

Contrast the objective of maximizing earnings with that of maximizing wealth.

$(2$ marks$)$ Question $2($Introduction to Financial Management$)$

What is financial management all about?

$(4$ marks$)$ Question $3($Working Capital Management$)$

a$)$ What is the Hedging principle and how can it be used to manage the working capital of

the firm?

b$)$ Describe the following term:

I. Permanent asset investments

ii$.$ Temporary asset investments

iii. Permanent sources of financing

IV$.$ Temporary sources of financing

v$.$ Spontaneous sources of financing

$(2$ marks$)$ Question $4($Time Value of Money$)$

Khaled plans to buy a car on $26/02/2025.$ He expects the price of the car will be SAR$150,000.$

Today, $26/02/2023$ he can save his money in an account which earns him $10\%$ return annually.

His uncle informs him that he will contribute SAR$10,000$ to Khaled's savings on $26/02/2024.$

How much money should he save now to reach the amount to purchase the car.

$(2$ marks$)$ Question, $5_{?}($Time Value of Money$)$

Joe Hernandez has inherited $$25,000$ and wishes to purchase an annuity that will provide him

with a steady income over the next $12$ years. He has heard that the local savings and

loan association is currently paying $6$ percent compound interest on an annual basis. If he were

to deposit his funds, what year$-$end equal$-$dollar amount $($to the nearest dollar$)$

would he be able to withdraw annually such that he would have a zero balance after his last

withdrawal $12$ years from now?