FM A Financial management function

Which are the three key decisions of financial management?

• 1 Investment, financing and dividend decisions
• 2 Audit, tax and legal decisions
• 3 Hiring, training and pay decisions
• 4 Marketing, production and sales decisions

What is the usual primary financial objective of a company?

• 1 Maximising shareholder wealth
• 2 Minimising all costs
• 3 Maximising employee numbers
• 4 Maximising short-term profit only

What is the agency problem?

• 1 Directors are always honest
• 2 Shareholders do not receive dividends
• 3 Companies cannot borrow
• 4 Managers may act in their own interests instead of the shareholders'

Which of these can reduce the agency problem?

• 1 Share options linked to performance
• 2 Hiding results from shareholders
• 3 Fixed pay with no targets
• 4 Removing all monitoring

Value for money means a combination of:

• 1 Profit, loss and tax
• 2 Debt, equity and cash
• 3 Economy, efficiency and effectiveness
• 4 Price, product and place

Which statement about stakeholder objectives is correct?

• 1 They are always the same
• 2 Only shareholders have objectives
• 3 They can conflict with one another
• 4 They never affect decisions