FM 413 Long quiz

Capital budgeting involves making decisions about long-term investments. Capital budgeting primarily deals with managing a company's short-term assets.

• Statement 1 is True, Statement 2 is False

• Statement 1 is False, Statement 2 is True

• Both statements are True

• Both statements are False

Working capital management focuses on day-to-day financial operations of a company. Working capital management involves deciding how to finance long-term investments.

• Statement 1 is True, Statement 2 is False

• Statement 1 is False, Statement 2 is True

• Both statements are True

• Both statements are False

Dividend policy involves decisions regarding the distribution of profits to shareholders. Dividend policy decisions have no impact on the capital structure of the company.

• Statement 1 is True, Statement 2 is False

• Statement 1 is False, Statement 2 is True

• Both statements are True

• Both statements are False

Personal finance is concerned with managing an individual's money, including saving and investing. Personal finance only deals with retirement planning.

• Statement 1 is True, Statement 2 is False

• Statement 1 is False, Statement 2 is True

• Both statements are True

• Both statements are False

Risk management in finance aims to identify and mitigate financial risks. Risk management involves only market risks and excludes operational risks.

• Statement 1 is True, Statement 2 is False

• Statement 1 is False, Statement 2 is True

• Both statements are True

• Both statements are False

Financing decisions determine how a company will raise capital. Financing decisions do not affect the cost of capital.

• Statement 1 is True, Statement 2 is False

• Statement 1 is False, Statement 2 is True

• Both statements are True

• Both statements are False

Financial planning is essential for estimating future financial needs. Financial planning deals only with managing short-term finances.

• Statement 1 is True, Statement 2 is False

• Statement 1 is False, Statement 2 is True

• Both statements are True

• Both statements are False

The goal of financial management is to maximize shareholder wealth. Profit maximization is always the same as wealth maximization.

• Statement 1 is True, Statement 2 is False

• Statement 1 is False, Statement 2 is True

• Both statements are True

• Both statements are False

Capital structure decisions affect a firm's risk profile. The right mix of debt and equity can minimize the cost of capital.

• Statement 1 is True, Statement 2 is False

• Statement 1 is False, Statement 2 is True

• Both statements are True

• Both statements are False

Financial control involves monitoring actual financial performance against budgets. Financial control is unrelated to financial planning.

• Statement 1 is True, Statement 2 is False

• Statement 1 is False, Statement 2 is True

• Both statements are True

• Both statements are False