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2. Competitors may take a controlling interest in the company if the current management is unable to run the company effectively. 3. This is also known as value maximization or net worth maximization. 4. The financial manager is concerned with the financed of the business

2. Competitors may take a controlling interest in the company if the current management is unable to run the company effectively. 3. This is also known as value maximization or net worth maximization. 4. The financial manager is concerned with the financed of the business

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Match A to B

2. Competitors may take a controlling interest in the company if the current management is unable to run the company effectively. 3. This is also known as value maximization or net worth maximization. 4. The financial manager is concerned with the financed of the business 5. Decisions related to trade off liquidity and solvency 6. Its formulation should lead to profitability, keeping while the image of the organization intact. 7. Current funds have to be invested in long-term activities in anticipation of an expected flow of future benefits spread over a long period of time. 8. They give debt financing a definite cost advantage over stock 9. It allows good and bad events to cancel each other out, reducing risk. 10. judgements about what is the right thing to do. 11. be if the project is not taken on. 12. independently. In addition, new information regarding securities arrives in the market in a random Each individual has his own set of values, which forms the basis for his personal The difference between the cash flows if the project is taken on versus what they will It is characterized by a large number of profit driven individuals who act manner. The corporation responds to pressure from different stakeholder groups. It is an extension of responsibility to embrace service to the public interest in such 13. 14. matters as environmental protection, employee safety, civil rights, and community involvement. 15. stockholders as much as possible. This should be constructed to also align managers' interest with those of 16. Cash received by the firm can be reinvested but nor accrued profits. The greater the risk associated with any financial decision, the greater the return 17. expected from it. 18. the required rate of return. 19. the new information immediately and buy and sell the security until they feel the price correctly Additional competition and added capacity can result in profits being driven down to When new information regarding securities arrives in the market, investors adjust to reflects the new information. 20. A peso received at a later time is worth less in buying power. COLUMN B A. Efficient market B. Production management C. Financing decision D. Tax laws E. Liquidity decisions F. Investment decisions G. Social responsiveness H. Risk return trade off 1. Capital budgeting J. Diversification K. Corporate social responsibility L. Agency problem M. Ethical dilemma N. Cost control O. Threat of takeovers P. Managerial compensations
Transcribed Image Text:2. Competitors may take a controlling interest in the company if the current management is unable to run the company effectively. 3. This is also known as value maximization or net worth maximization. 4. The financial manager is concerned with the financed of the business 5. Decisions related to trade off liquidity and solvency 6. Its formulation should lead to profitability, keeping while the image of the organization intact. 7. Current funds have to be invested in long-term activities in anticipation of an expected flow of future benefits spread over a long period of time. 8. They give debt financing a definite cost advantage over stock 9. It allows good and bad events to cancel each other out, reducing risk. 10. judgements about what is the right thing to do. 11. be if the project is not taken on. 12. independently. In addition, new information regarding securities arrives in the market in a random Each individual has his own set of values, which forms the basis for his personal The difference between the cash flows if the project is taken on versus what they will It is characterized by a large number of profit driven individuals who act manner. The corporation responds to pressure from different stakeholder groups. It is an extension of responsibility to embrace service to the public interest in such 13. 14. matters as environmental protection, employee safety, civil rights, and community involvement. 15. stockholders as much as possible. This should be constructed to also align managers' interest with those of 16. Cash received by the firm can be reinvested but nor accrued profits. The greater the risk associated with any financial decision, the greater the return 17. expected from it. 18. the required rate of return. 19. the new information immediately and buy and sell the security until they feel the price correctly Additional competition and added capacity can result in profits being driven down to When new information regarding securities arrives in the market, investors adjust to reflects the new information. 20. A peso received at a later time is worth less in buying power. COLUMN B A. Efficient market B. Production management C. Financing decision D. Tax laws E. Liquidity decisions F. Investment decisions G. Social responsiveness H. Risk return trade off 1. Capital budgeting J. Diversification K. Corporate social responsibility L. Agency problem M. Ethical dilemma N. Cost control O. Threat of takeovers P. Managerial compensations
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