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- The finance manager is carefully selecting the best investment alternatives for a stable return from the investment opportunities. Which of the following role he is executing in the company? Select one: A. Financing Decision B. Interrelation with Departments C. None of the given options D. Investment DecisionWhat is the limitation of Traditional approach of Financial Management? اخترأحد الخيارات a. All of the option b. More emphasis on long term problems c. Ignores allocation of resources d. One-sided approach(b) Kindly Provide brief answers to the following:i. What is the difference between systematic and unsystematic risk?ii. What is strategic business plan and why it is important for the success of a firm? Explain in your own words.iii. Explain for which types of projects, a detailed capital budgeting analysis is required and why?iv. What do you mean from retained earnings breakpoint? Explain in your own words with an example.
- 1. Which of the following statements most appropriately describe how agency cost affect the firms choice structure? Explain. a. When firm owners borrow money they have an incentive to engage in excessive risk taking (that is investing in very risky projects). Since they are managing someone else money.b. When firm have very limited investment opportunities and little debt financing combine with wealth profit that provide them with free cash flow, their management team might squander the firms' earnings on questionable investments. 2. What is the primary weakness of using EBIT-EPS analysis as a financing tool. 3. Why might firms who's sale level change drastically overtime, choose to use debt only sparingly in their capital structure 4. What does the term independence hypothesis means as it applies to capital structure theory 5. Explain how industry norms might be used by the finance manager in the design of the company's financing mix note: if you can provide the source of the info,…Which of the statement is TRUE in financial decision making? A. When the economy is growing of proceeding towards recovery, the finance manager should not be eager to avail of investment opportunities. B. When the economy is facing a slump, the finance manager should proceed with opportunities. C. When the economy is facing a slump, the finance manager should proceed with care.Select all that is true about the role of financial managers and the types of financial decisions they make. Select one or more: a. Capital structure describes the mix of short-term liabilities a firm uses to finance its short-term assets. b. The optimal financial management strategy of a financial manager is to reduce the overall risk level of the firm. c. The duties of the financial manager includes determining the capital structure and which projects the firm should undertake. Od. Size and timing of cash flows is unimportant in a capital budgeting decision. e. Capital Budgeting function involves planning and determining the firm's short term investments. Of. Determining the appropriate level of inventory is a working capital management function. ZA do W X L
- Which of the following statements is correct?a. An increase in a firm’s inventories will call for additional financing unless theincrease is offset by an equal or larger decrease in some other asset account.b. A high quick ratio is always a good indication of a well-managed liquidityposition.c. A relatively low return on assets (ROA) is always an indicator of managerialincompetence.d. A high degree of operating leverage lowers the risk by stabilizing the firm’searnings stream4. Which of the following is false about the risk-shifting problem? Risk-shifting leads to a transfer of value from debt-holders to equity holders Risk-shifting leads prospective lenders to pay less for debt and require higher interest payments Risk-shifting arises when shareholders choose negative NPV projects with higher risk Risk-shifting is an example of an agency cost of debt Risk-shifting is greater in firms with low leverageIf the firm is large scale, it manages the financial requirements with the help of Select one a Internal Sources b None of the options c. External Finance d. Both Internal and External
- Answer the following question in essay. What do you understand by current ratio? What are it uses? What are its limitations? Ratio analysis is widely used as a tool of financial analysis, yet it suffers from various limitations. Explain. How can solvency of a firm be measured? What you understand by Liquidity ratios? Discuss their significance. Page 1 Module PSFM08 MANAGERIAL ACOUNTING WITH FINANCIAL ANALYSIS AND REPORTING Explain the importance of profitability ratio. How they are worked out?Explain how you will apply in real life the following AXIOMS of FINANCIALMANAGEMENT AXIOM 1: RISK-RETURN TRADE OFFAXIOM 2: TIME VALUE OF MONEYAXIOM 3: CASH NOT PROFIT IS KINGAXIOM 4: INCREMENTAL CASH FLOWSAXIOM 5: EFFICIENT CAPITAL MARKETSAXIOM 6: THE CURSE OF COMPETITIVE MARKETSAXIOM 7: AGENCY PROBLEMAXIOM 8: TAXES BIAS BUSINESS DECISIONSAXIOM 9: ALL RISK IS NOT EQUALAXIOM 10: ETHICAL BEHAVIOR IS DOING THE RIGHT THING AND ETHICALDILEMMAS ARE EVERYWHERE IS FINANCE.Managers may sometimes be criticized for being overly conservative. If a firmdoes not borrow as much as it should, reach its optimal capital structure, andcomment on the market forces that might pressure management to use more debt.