Pop Quiz Financial Management

What is the primary goal of corporate finance?

• Maximizing shareholder wealth

• Maximizing employee satisfaction

• Maximizing customer loyalty

• Maximizing market share

Which of the following represents the key financial decision areas in corporate finance?

• Capital budgeting, financial analysis, and marketing strategies

• Capital budgeting, financing decisions, and working capital management

• Human resource management, capital budgeting, and financial planning

• Financial analysis, risk management, and dividend policy

Which financial concept refers to the process of determining how to invest funds in long-term assets that will generate returns over time?

• Working capital management

• Financial leverage

• Cost of capital

• Capital budgeting

Which of the following financial statements provides a snapshot of a company's financial position at a specific point in time?

• Income statement

• Statement of cash flows

• Balance sheet

• Statement of retained earnings

What is the concept of "working capital" in corporate finance?

• Related to firm's daily ormonthly inflows and outflows

• 
  The amount of capital invested in long-term assets

• The total assets of a company

• The amount of capital invested in equity financing

In the context of corporate finance, what does the term "agency relationship" refer to?

• The relationship between a company and its customers

• The relationship between a company and its suppliers

• The relationship between shareholders and management

• The relationship between competitors in the market

What is the primary agency problem that arises between shareholders and management?

• Market volatility

• Excessive competition

• 
  Lack of product innovation

• Conflict of interest

Which financial concept refers to the separation of ownership and control in a corporation?

• Financial leverage

• Shareholder activism

• Corporate governance

• 
  Stakeholder management

Which of the following is the primary objective of financial decision-making in a corporation?

• Maximizing current sales revenue

• Maximizing corporate debt

• Maximizing shareholders wealth

• Increasing salaries for managers

When a company decides to invest in a new project, which financial decision type is primarily involved?

• Dividend decision

• Investment decision

• Working capital decision

• Financing decision