1. Which of the following is NOT a function of financial management? A. Deciding the best...
1. Which of the following is NOT a function of financial management?
A. Deciding the best sources of finance. B. Spending money on capital expansion C. Preparation of tax returns D. Evaluating how much dividends to pay shareholders.
2. The process of planning and managing a firm’s long-term investments is called; A. Working capital management. B. Financial depreciation. C. Agency cost analysis. D. Capital budgeting.
3. A profitability index (PI) greater than 1 creates a value for shareholders
A. True B. False
4. NPV measures the time to recover the initial investment.
A. True B. False
5. Agency problem exists between the creditors (principals) and the management (agent)
A. True B. False
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