Reference no: EM132631124

Problem 1: Financial managers make decisions that:

Select one:

A. maximise the owners' wealth.

B. accord with the owners' decisions.

C. maximise the owners' share values.

D. all of the above.

Problem 2: Which one of the following statements about working capital trade-off is NOT true?

Select one:

A. Financial managers need to balance shortage costs against carrying costs to find an optimal strategy.

B. If carrying costs are smaller than shortage costs, then the company will maximise value by adopting a more restrictive strategy.

C. If shortage costs dominate carrying costs, the company will need to move toward a more flexible policy.

D. Management will try to find the level of current assets that minimises the sum of the carrying costs and shortage costs.