1. The Financial Management Decision Process. What are the three types of financial management decisions? For each type of decision‚ give an example of a business transaction that would be relevant. · There are three types of financial management decisions: Capital budgeting‚ Capital structure‚ and Working capital management. · Capital budgeting is the process of planning and managing a firm’s long-term investments. The key to capital budgeting is size‚ timing‚ and risk of future cash flows
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Financial Management Corporations: Create money Shareholders * board of directors * 7-10 people * corporate governance * monitor the manager’s performance * Sub committees * auditor commitee * compensation committee * buffer between shareholders and the managers CFO * strategic financial decisions * Spending money: how the money is spent * financial investment projects * capital budgeting
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Costs – expenses that vary proportionately with changes in output. Sunk Costs – expenses already incurred that have no salvage value Opportunity Costs – profits lost when one alternative is chosen over another that would have provided greater financial benefits. Avoidable Costs – expenses resulting from poor productivity incurred if an investment is not made. Out-of-Pocket Costs – actual cash flow associated with a particular alternative. Cost of Capital – usually expressed as percentage rate
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FIN 534 (Strayer) Financial Management Week 9 Quiz 8 Question 1 2 out of 2 points Which of the following statements about dividend policies is correct? Answer Selected Answer: The clientele effect suggests that companies should follow a stable dividend policy. Correct Answer: The clientele effect suggests that companies should follow a stable dividend policy. Question 2 2 out of 2 points If a firm adheres strictly to the residual dividend policy‚ the issuance of new common stock
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The traditional approach of financial management was all about profit maximization.The main objective of companies was to make profits. The traditional approach of financial management had many limitations: 1.Business may have several other objectives other than profit maximization.Companies may have goals like: a larger market share‚ high sales‚greater stability and so on.The traditional approach did not take into account so many of these other aspects. 2.Profit Maximization has to defined after
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In MS Project you need to do the following: 1. Input activity‚ duration and predecessor 2. Specify start date to July 2‚ 2012 3. Specify the holidays – what I did is to specify the January 1‚ Thanksgiving Day (4th Thursday in November)‚ and December 25 from 2012 to 2015 as non-working days by selecting Tools‚ clicking Change Working Time‚ and then selecting the date 4. Afterwards‚ you are now ready to answer the questions Question 1 Question 2 Clear stadium site – Drive support piling
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risk associated with individual events that affect a particular asset: • Firm – specific risk that’s reduced through the construction of diversified portfolios 4. Business Risk – risk associated with the nature of a business 5. Financial Risk – risk associated with the types of financing used to acquire assets 6. Non-diversifiable risk (systematic risk) – risk associated with fluctuations in securities prices and other non-firm-specific factors; market risk that is not reduced
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Financial Management and Control Kingspan Assignment 6th December 2012 Contents Introduction 4 1. Profitability Ratios 4 1.1 Gross Profit Ratio 4 1.2 Net Profit Ratio 4 1.3 Return on Capital Employed (ROCE) 4 2. Liquidity Ratios 5 2.1 Current Ratio 5 2.2 Quick Ratio/Acid Test Ratio 5 3. Efficiency Ratios 6 3.1 Debtors Days 6 3.2 Creditors Days 6 3.3 Inventory Turnover Days 6 4. Gearing Ratios 7 4.1 Gearing Ratio 7 4.2 Debt to Equity Ratio 7 4.3 Interest Cover
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the following is the BEST example of ethical behaviour? 1) ABC Corp. promised a hefty compensation package to its external auditor 2) DEF Company hired its workers from developing countries to avoid paying high wages to the local people 3) Management at JKL Inc. borrowed heavily to fund risky expansion 4) MNO executives willingly cut their own pay when their firm suffered from economic downturns f)
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Fall 2013 Corporate Financial Management Due: Thursday‚ October 31st Chapter 7 & Options 1. Assume that you sold a 100 call for $10. Calculate your profit/loss per share if the future stock prices are $80‚ $90‚ $100‚ $110. What type of investor (bullish or bearish) sell a call? Why? 2. Assume that you bought a 110 put for $11. Calculate your profit/loss per share if the future stock prices are $ $90‚ $100‚ $110‚ $120. What type of investor (bullish or bearish) buy a put? Why? 3
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