The Goals and Functions of Financial Management
Chapter 01 The Goals and Functions of Financial Management Multiple Choice Questions 1. What is the primary goal of financial management? A. Increased earnings B. Maximizing cash flow C. Maximizing shareholder wealth D. Minimizing risk of the firm Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 01-03 Examine the primary goal of finance as the maximization of shareholder wealth as measured by share price. Topic: 01-06 Goals of Financial Management 2. Proper risk-return management means that: A. the firm should take as few risks as possible. B. consistent with the objectives of the firm, an appropriate trade-off between risk and return should be determined. C. the firm should earn the highest return possible. D. the firm should value future profits more highly than current profits.