1-1
What is finance? What types of decisions do people in finance make? (LO 1-1)
1-2
Why should persons who pursue careers in business have a basic understanding of finance even if their jobs are in areas other than finance, such as marketing or information systems? (LO 1-1)
1-3
What does it mean to maximize the value of a corporation? (LO 1-3)
1-4
In general terms, how is value measured? What three factors determine value? How does each factor affect value? (LO 1-3)
1-5
What is the difference between stock price maximization and profit maximization? Under what conditions might profit maximization not lead to stock price maximization? (LO 1-3)
1-6
What are some actions stockholders can take to ensure that management's interests and the interests of stockholders align? What are some other factors that might influence management's actions? (LO 1-3)
1-7
If you were the owner of a proprietorship, would you make decisions to maximize the value of your business or your personal satisfaction? (LO 1-2 & LO 1-3)
1-8
Suppose you are the president of a large corporation. How do you think the stockholders will react if you decide to substantially increase the proportion of the company's assets that is financed with debt. (LO 1-3)
1-9
What is corporate governance? How does corporate governance affect the returns generated for stockholders? (LO 1-4)
1-10
Why do U.S. corporations go international? (LO 1-5)
1-11
What are some factors that make financial decision making more complicated for firms that operate in foreign countries than for purely domestic firms? (LO 1-5)
1-12
Describe the four general areas included in the study of finance. Why is it important for a person who works in the financial markets to understand the responsibilities of a person who works in managerial finance? (LO 1-1)
1-13
Describe the major differences among the three primary forms of business organization (proprietorship, partnership, and corporation). (LO 1-2)
1-14
Why do you think hybrid forms of business, such as limited liability partnerships (LLP) and limited liability companies (LLC), have evolved over time? (LO 1-2)
1-15
What does it mean to be ethical in business dealings? Should unethical business behavior be encouraged by business owners (stockholders) if such behavior increases the value of the stock they own? (LO 1-3 & LO 1-4)
1-16
Can a firm sustain its operations by maximizing stockholders' wealth at the expense of other stakeholders? (LO 1-3)
1-17
Compared to the ownership structure of U.S. firms, which are "open" companies, what are some advantages of the ownership structure of foreign firms, many of which are "closed" companies? Can you think of any disadvantages? (LO 1-5)
1-18
Should stockholder wealth maximization be thought of as a long-term goal or a short-term goal? Why? (LO 1-3)
1-19
Discuss the possibility of agency problems in a business that is a
(a)proprietorship,
(b)partnership with five partners, and
(c)corporation with 100,000 stockholders.
(LO 1-3)
1-20
Discuss the validity of the following statement: "When a firm's stock price falls, it is evidence that the firm's managers are not acting in the best interests of the shareholders." (LO 1-3)
1-21
Why do most firms form as proprietorships or partnerships when they first start doing business and then change to the corporate form of business when they grow larger? (LO 1-2)
1-22
Would the management of a firm in an oligopolistic industry or in a highly competitive industry be more likely to engage in "socially conscious" practices? Explain your reasoning. (LO 1-3)
1-23
Why do U.S. corporations build manufacturing plants abroad when they could build them at home? (LO 1-5)
1-24
What is an agency problem? What actions might be taken to mitigate the potential for agency problems in a large, publicly-traded corporation? (LO 1-3)
1-25
How can knowledge of finance concepts help you make personal financial decisions you will confront in life? (LO 1-1)
FAQs
Answer 1-1 Finance - Finance term generally means management of Money and in finance an organisation has to made decision related to investing, borrowing, lending, budgeting, saving and forecasting.
What is financial decision-making? ›
Financial decision-making is a crucial aspect of business management. It involves choosing between available alternatives to achieve financial goals. From budgeting to investment choices, every decision impacts financial stability and growth.
What is finance chegg? ›
Finance is the study of money, finances and investments.
What is the best financial decision you have ever made and how did it benefit you? ›
The best decision I made was refusing to finance anything other than my house. If I could afford a $500/month car payment, I put that aside until I had enough to buy the car outright. Essentially, living within my means and not insisting on immediate gratification was the best financial decision EVER.
What is the most important type of decision that the financial manager makes? ›
The financial manager's most important job is to make the firm's investment decisions. This, also known as capital budgeting, is the most important job for this type of manager.
What are the types of financial decision? ›
There are three primary types of financial decisions that financial managers must make: investment decisions, financing decisions, and dividend decisions. In this article, we will discuss the different types of financial decisions that are taken in order to manage a business's finances.
What are the three types of decision-making in finance? ›
When it comes to managing finances, there are three distinct aspects of decision-making or types of decisions that a company will take. These include an Investment Decision, Financing Decision, and Dividend Decision.
Do Chegg workers get paid? ›
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The estimated total pay range for a Subject Matter Expert at Chegg is $73K–$130K per year, which includes base salary and additional pay. The average Subject Matter Expert base salary at Chegg is $97K per year.
Do you get paid from Chegg? ›
Become a Chegg Tutor:
If you have strong knowledge in subjects like maths, science, english or any other academic field, you can apply to become a tutor and help students with their questions and assignments. Chegg pays tutors an hourly rate for their tutoring services.
Can you make money using Chegg? ›
One way to earn money on Chegg is by becoming a Chegg Tutor. As a tutor, you can answer questions and provide explanations to students who are using the platform for homework help. You can set your own hourly rate and work as much or as little as you want.
There are three types of financial decisions- investment, financing, and dividend. Managers take investment decisions regarding various securities, instruments, and assets. They take financing decisions to ensure regular and continuous financing of the organisations.
Why are financial decisions important? ›
Strong financial knowledge and decision-making skills help people weigh options and make informed choices for their financial situations, such as deciding how and when to save and spend, comparing costs before a big purchase, and planning for retirement or other long-term savings.
What's the best financial decision? ›
Here are 10 decisions that you can make to help ensure your finances are working as a support system for you.
- Save at least 25% of income. ...
- Reverse Budgeting. ...
- Create a good philosophy around competing goals. ...
- Figure out what is best: renting or buying your home. ...
- Take the stress out of finances. ...
- Max out retirement plans.
The financial manager's responsibilities include financial planning, investing (spending money), and financing (raising money). Maximizing the value of the firm is the main goal of the financial manager, whose decisions often have long-term effects.
What are the three major decision areas that confront the financial manager? ›
It deals in three main dimensions of financial decisions namely, Investment decisions, Financial decisions and Dividend decisions.
- Investment Decisions. Investment decisions refer to the decisions regarding where to invest so as to earn the highest possible returns on investment. ...
- Financial Decisions. ...
- Dividend Decisions.
Financial accounting helps managers create budgets, understand public perception, track efficiency, analyze product performance, and develop short- and long-term strategies, among several other decisions aided by accounting figures.
Why is financial decision-making important? ›
Strong financial knowledge and decision-making skills help people weigh options and make informed choices for their financial situations, such as deciding how and when to save and spend, comparing costs before a big purchase, and planning for retirement or other long-term savings.
What are the 5 steps in the financial decision-making process? ›
Plan your financial future in 5 steps
- Step 1: Assess your financial foothold. ...
- Step 2: Define your financial goals. ...
- Step 3: Research financial strategies. ...
- Step 4: Put your financial plan into action. ...
- Step 5: Monitor and evolve your financial plan.
There are four main financial decisions- Capital Budgeting or Long term Investment decision (Application of funds), Capital Structure or Financing decision (Procurement of funds), Dividend decision (Distribution of funds) and Working Capital Management Decision in order to accomplish goal of the firm viz., to maximize ...
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