Financial Management Quiz

Financial management is more concerned with raising, allocating, and controlling the company's funds.

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Under a sole proprietorship type of business, the income tax returns filed by the owner do not include the income or loss of the business.

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The primary objective of financial management is to maximize profit.

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Different people with different data and perspective about the future will give different intrinsic values of the company stock.

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Profit maximization does not consider risk or uncertainty, whereas wealth maximization does.

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Higher cash inflows in the early years would mean better benefits to the company because of the possibility that it would generate other potential income.

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The reported accounting profits are mere estimates of how much net income was generated for a particular period of time.

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The weighted average cost of capital is the maximum required rate of return on an investment.

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Under the dividend policy decision, aggressiveness is determined if most of the net income are reinvested back to the company.

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One of the advantages of a sole proprietorship type of business is its unlimited life.

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