Finance Skills for Managers - D076 Questions and Answers Rated A

Document Content and Description Below

Finance Skills for Managers - D076 Questions and Answers Rated A Which area of finance deals with sources of funding and the capital structure of corporations and seeks to increase the value of a f... irm to its owners? ✔✔Business finance What is the primary difference between finance and accounting? ✔✔Finance focuses on the future, while accounting is generally backward-looking. Which subspecialty of finance primarily involves deciding which assets will create more wealth and earn positive returns? ✔✔Investments What is the primary goal of the financial manager of a firm? ✔✔To maximize owner wealth What should be the main question a firm asks when considering any investment decision? ✔✔Do the benefits of this investment outweigh the costs? What is the primary aim of personal finance goals? ✔✔To maximize satisfaction from products purchased and services obtained Which task does a financial manager perform when choosing to obtain a loan to purchase a piece of equipment for a new project? ✔✔Making financing decisions Which financial career focuses on investing capital into firms whose shares are not currently sold on any public stock exchange? ✔✔Private equity Which task does a financial manager perform when assessing the costs and benefits of potential projects? ✔✔Making investment decisions What tool can you use to understand your overall personal cash flows? ✔✔Budgeting What is a reasonable alternative to keeping an emergency stash of cash? ✔✔Investing in a savings account You want to buy a house, so you obtain a mortgage for which you can afford the monthly payments. What process have you engaged in as part of your financial decision-making? ✔✔Financing What area of finance involves deciding which assets to invest in to create wealth in the future? ✔✔Investments Hannah is the financial manager of a firm. A project that she has recommended has been approved and will cost $5 million. Since the company does not have enough cash on reserve, Hannah must figure out how to raise enough money to start the project. She can choose whether to issue new bonds, new stocks, a mortgage loan, or some combination of those options. What task is Hannah performing in this scenario? ✔✔Making a financing decision Maria and Mateo are setting financial goal [Show More]

Last updated: 1 year ago

Preview 1 out of 76 pages