Questions from Managerial Finance

Q: How is the percent-of-sales method used to prepare

How is the percent-of-sales method used to prepare pro forma income statements?

Q: What is the significance of the “plug” figure, external

What is the significance of the “plug” figure, external financing required? Differentiate between strategies associated with positive values and with negative values for external financing required.

Q: Which three statements result as part of the short-term (

Which three statements result as part of the short-term (operating) financial planning process?

Q: What is the financial manager’s objective in evaluating pro forma statements?

What is the financial manager’s objective in evaluating pro forma statements?

Q: What does it mean to say that corporations face a double taxation

What does it mean to say that corporations face a double taxation problem?

Q: Define agency problems, and describe how they give rise to agency

Define agency problems, and describe how they give rise to agency costs. Explain how a firm’s corporate governance structure can help avoid agency problems.

Q: How can the firm structure management compensation to minimize agency problems?

How can the firm structure management compensation to minimize agency problems?

Q: What is risk? Why must financial managers consider risk as well

What is risk? Why must financial managers consider risk as well as return when they evaluate a decision alternative or action?

Q: Is maximizing shareholder wealth inconsistent with having concern for the welfare of

Is maximizing shareholder wealth inconsistent with having concern for the welfare of a firm’s other stakeholders?

Q: What are the main types of decisions that financial managers make?

What are the main types of decisions that financial managers make?