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Q. Explain about Modern Approach of financial management?
The modern approach considers the term financial management in a broad sense. According to this approach the finance function covers both acquisitions of funds as well as their efficient utilization. According to this approach the financial management is concerned with the solution of three major problems relating finance:
(1) What is the total amount of funds an enterprise should commit?
(2) How must the funds required be raised?
(3) In what precise assets the enterprise should invest its funds? Therefore in the modern approach the financial management is responsible for taking three decisions.
It is in the form of third-party guarantees which protect against losses up to a particular fixed level. This is available in the form of a corp
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Unity of Command Unity of command is the principle in which each subordinate should be responsible to only one manager.
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