Summary: Finance 2.1 (Foundations)
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Financial Management and the Firm
This is a preview. There are 15 more flashcards available for chapter 06/09/2016
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Incremental (marginal) cash fow is...
the difference between the proected cashflow if the project is selected, versus what the will be, if the project is not selected -
What is it investors want to be compensated for?
- For delaying consumption
- Taking on risk
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Agency problems can be avoided by...
- monitoring (annual reports)
- compensation schemes (stock options)
- market mechanisms (takeovers)
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Besides the 5 principles, what does a business need to posses, also?
Ethics and trust, in business and personal wise -
Which three basic issues are addressed bu the stufy of finance?
- Capital budgeting decision (long-term investment)
- Capital structure decision (funding)
- Working capital decision (cash flows)
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The Chief Financial Officer (CFO) or Vice President of Finance has duties like...
- Oversee financial planning
- Oversee strategic planning
- Control over cash flow
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The duties of a treasure can be...
- cash management
- credit managament
- capital expenditures
- raising capital
- financial planning
- management of foreign currencies
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The duties of a controller can be...
- taxes
- financial statements
- cost accounting
- data processing
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The legal form of a Sole Proprietorship is...
- owned by an individual
- owner maintains title to assets and profits
- unlimited liability
- termination accours by owner's choise or death
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The legal form of a Partnership is
- owned by two or more individuals
- general partners have unlimited liability
- limited (additional) partners are restricted to their investment
- limited partners have mo management duties, and no name in the firm
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