a.
To discuss: Whether the given statement is classified under true of false.
a.
Explanation of Solution
The reasons supporting the statement to be false are as follows:
Financial planning is the process of investing in assets according to the risk and its returns.
Therefore, the given statement is classified as “False”.
b.
To discuss: Whether the given statement is classified under true of false.
b.
Explanation of Solution
The reasons supporting the statement to be false are as follows:
Financial planning is concerned with the possible risks and possible outcomes of their investment choices.
Therefore, the given statement is classified as “False”.
c.
To discuss: Whether the given statement is classified under true of false.
c.
Explanation of Solution
The reasons supporting the statement to be true are as follows:
Financial planning is essential for both decisions related to finance and investments and they should be taken as a collective decision by management.
Therefore, the given statement is classified as “true”.
d.
To discuss: Whether the given statement is classified under true of false.
d.
Explanation of Solution
The reasons supporting the statement to be false are as follows:
Typical horizon for financial planning is above three years.
Therefore, the given statement is classified as “false”.
e.
To discuss: Whether the given statement is classified under true of false.
e.
Explanation of Solution
The reasons supporting the statement to be true are as follows:
Individual investment decision plans are not included in the financial plans because investments are added in their categories.
Therefore, the given statement is classified as “true”.
f.
To discuss: Whether the given statement is classified under true of false.
f.
Explanation of Solution
The reasons supporting the statement to be true are as follows:
Financial planning requires accurate and consistent
Therefore, the given statement is classified as “true”.
g.
To discuss: Whether the given statement is classified under true of false.
g.
Explanation of Solution
The reasons supporting the statement to be false are as follows:
Financial models need not have unnecessary details as it may lead to confusions.
Therefore, the given statement is classified as “false”.
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Chapter 18 Solutions
EBK FUNDAMENTALS OF CORPORATE FINANCE
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