Unit 1 - Challenge 1 Goals and Organizations of Financial Management Questions and Answers

Unit 1 - Challenge 1 Goals and Organizations of Financial Management Questions and Answers Finance is the study of fund management and a. credit b. accounting c. economics d. asset allocation asset allocation The primary purpose of finance is to __________. a. manage assets in a way that maximizes returns b. pay off debt as quickly as possible c. study the effects of the economy on businesses d. keep track of a business's cash flow manage assets in a way that maximizes returns Corporate finance focuses primarily on decisions related to __________. a. distribution and marketing b. production and advertising c. investment and financing d. record-keeping and communication investment and financing ______ is the process of determining the price that market participants would likely pay for something. a. Accounting b. Analysis c. Valuation d. Financing valuation Valuation may be determined through __________. a. allocation of scarce resources b. fundamental analysis of financial statements c. oversight of corporate governance d. implementation of business strategies fundamental analysis of financial statements The price at which an asset would trade in a competitive setting is its __________. a. market value b. stakeholder value c. fundamental value d. book value market value An investment must meet 3 main criteria: 1. Maximize value of firm 2. Be financed appropriately 3. If no investment opportunity, cash must be returned