a. Discuss the factors that are likely to influence the desired level of cash of a companyb. Outline the advantages and disadvantages of using short term debt, as opposed to long term debt, in the financing of working capit. 1c. Why cash flows rather than profits are most desirable in financial management?d. Explain the term "agency relationships" and discuss the conflicts that might exist in the relationship between'i) Shareholder and managersii) Shareholders and creditorsWhat steps may be taken to overcome these conflicts? (.

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Answered: a. Discuss the factors that are likely…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

Financial statement analysis is the process of analyzing a company's financialstatements for decision-making purposes. External stakeholders use it to understand the overall health of an organization as well as to evaluate financial performance and business value. Internal constituents use it as a monitoring tool for managing finances. Differentiate the three main types of financial statements: the balance sheet, income statement, and cash flow statement ???
Identify which one of the following statement is not correct: a. Dividend decision is the primary function of the financial manager b. The financial manager need not concentrate on mobilization of finance c. Cash management plays a major role in the area of finance d. Management control is an emerging role of the financial manager
Which is NOT the primary concerm of the financial manager? A Raising funds for the fim to finance its assets in the best possible way. B. Determining how much debt funds to be employed by the firm. C. Seeing that the financial statements of the firm are properly presented. D. Finding the right proportion of investment in long-term assets. 1. Important functions of financial management are 2. A. To control expenditures of day to day operations of the business. To identify desirable investment in fixed and current assets. C. To provide for adequate financing. D. All of the above. B.
Select all that is true about the role of financial managers and the types of financial decisions they make. a. Capital Budgeting function involves planning and determining the firm’s short term investments. b. Determining the appropriate level of inventory is a working capital management function. c. The duties of the financial manager includes determining the capital structure and which projects the firm should undertake. d. Capital structure describes the mix of short-term liabilities a firm uses to finance its short-term assets. e. The optimal financial management strategy of a financial manager is to reduce the overall risk level of the firm. f. Size and timing of cash flows is unimportant in a capital budgeting decision.
Choose the correct explanation of a control function of finance 1. reflects quantitvely the production for managerial descusions2. check the appropriateness and authorization of money transactions3. show to managers distrubuitonal proportions4. prevents cheats and crimes in monetary operationsA. 1 and 2 onlyB. 2 and 3 onlyC. 1,3 and 4 onlyD. 1,2,3 and 4
Investors and creditors look to the income statement to see whether a company Group of answer choices A. is paying sufficient dividends to owners. B. owns enough assets to pay its debts. C. has a positive cash flow from operations. D. is profitable.
Which of the following would increase cash flow for a firm? a. A purchase of fixed assets b. Cash sales c. Purchase of markatable securities d. Credit sales
11. Which of the following security holders receives a lower returns with low risk? . T-Bill B. Common shareholders C. Stakeholders D. Creditors 12. The advantage of a company compared a sole trader as form of business organisation is: A. Quick decision making B. Access to external professional management skills C. Use of own funds D. Inability to access external funds Thank you!!!
Which one of the following characteristics of the positive accounting theory brings forward the problem of Opportunistic Behavior? Oa. It wants to minimize costs associated with contracts of the firm. O b. It recognizes the flexibility in choosing accounting policies by the firm. O c. It recognizes the existence of economic consequences in the firm. O d. It aims to maximize the prospects for survival of the firm.
The role of finance manager, in a modern business, is Select one: O a. Pervasive in all the activities of business firm O b. None of the options O c. Pervasive in cost activities of business firm O d. Pervasive in liquidity activities of business firm O e. Pervasive in financial activities of business firm
A company's stakeholders often differ in their financial statement focus. For example, some stakeholders focus primarily on the income statement, while others focus primarily on the statement of cash flows or the balance sheet. For each of the following situations, indicate which financial statement would be the most likely focus for the stakeholder. Choose either the income statement, balance sheet, or statement of cash flows. Situation 4: Assume that you are considering taking a job (internal stakeholder) with either Sears or JCPenney. Situation 5: Assume that you are a banker for US Bank (capital market stakeholder), and you are considering whether to grant a major credit line (loan) to Target. The credit line will allow Target to borrow up to $400 million for a five-year period at the market rate of interest.
explain the overall objective of a financial manager, including approaches to achieve the objective. Explain how the objective relates to market value added, economic value added, and free cash flow.

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