1. A renowned Chief Executive Officer (CEO) was quoted as saying “Sound financial management is…

1. A renowned Chief Executive Officer (CEO) was quoted as saying “Sound financial management is…

1. A renowned Chief Executive Officer (CEO) was quoted as saying “Sound financial management is the key to the prosperity and sustainability of any business.” Based on this quote answer the following questions

a. Present the definition of financial management

· A striking feature of large corporations is that the owners (the stockholders) are usually not directly involved in making business decisions, particularly on a day-to-day basis. Instead, the corporation employs managers to represent the owners’ interests and make decisions on their behalf. In a large corporation, the financial manager would be in charge of answering the three questions we raised in the preceding section.

b. Forward your arguments in favor or against the statement made by the CEO by taking into consideration the four major decision areas covered under financial management.

c. Ifall CEOs ofcompanies had an objective of maximizing shareholder wealth, would society overall tend to be better or worse off? Discuss whether this is consistent with the above quotation.

1. A renowned Chief Executive Officer (CEO) was quoted as saying “Sound financial management is…

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