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ASSIGNMENT
BMMF5103 MANAGERIAL FINANCE
JANUARY 2015
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INSTRUCTIONS TO STUDENTS
1. This assignment contains question that is set in English.
2. Answer in English only.
3. Your assignment should be typed using 12 point Times New Roman font and 1.5 line spacing.
4. You must submit your hardcopy assignment to your Facilitator and ON-LINE via the MyVLE. Refer to the portal for instructions on the procedures to submit your assignment on-line. You are advised to keep a copy of your submitted assignment and proof of the submission for personal reference. Your assignment must be submitted on 21st – 29th March 2015.
5. Your assignment should be prepared individually. You should not copy another person’s assignment. You should also not plagiarise another person’s work as your own.
EVALUATION
This assignment accounts for 60% of the total marks for the course.
ASSIGNMENT QUESTION
PURPOSE
To evaluate the managerial finance concept based on relevant financial information as well as supported by the foundation of corporate finance theories.
REQUIREMENT
Answer the following questions using the relevant concepts and corporate finance theories.
QUESTION
a) The relationship between the shareholders and the managers is well represented by the principal–agent theory. Discuss the mechanisms available to restrain the managers from pursuing their own aims. (25 marks)
b) “Liquidity ensures the ability of the firm to honor its short term commitments. This means that the firm has adequate cash to pay for its bills, to make unexpected large purchases to meet its contingencies, at all times”. Discuss. (25
References: should be latest (year 2005 onwards) Notes: Assignments should be submitted according to the due date. You are to submit a softcopy of your assignment online through myVLE and a hardcopy to your facilitator. Plagiarism is not acceptable. If you are not sure what is meant by plagiarism, refer to the various websites which discuss this matter, e.g. owl.english.purdue.edu/handouts.