Explain the following statement: The optimal financial policy depends in an important way on the nature of the firm's assets?

Q: What is the connection between Business Valuation and Financing Options ?

A: Business valuation:  The economic worth of a firm or business unit is determined via business…

Q: what is risk and return in the context of financial decision making?

A: Risk and return are two very important concept used in any financial decision making. Two financial…

Q: What is the difference between systematic and unsystematic risk?

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: What is the risk-return tradeoff that arises when . firm manages its working capital? Give tangible…

A: Financial risk is referred as the possibility or chance of losing the investment, basically an…

Q: could you explain the purposes of business portfolio analysis and diversification analysis,…

A: Diversification: It is the phenomena of spreading the investment around so that exposure limited to…

Q: what is financial leverage and its implications for company performance?

A: Company borrow amounts to buy assets and do business.

Q: The financial leverage implications for company performance?

A: Financial Leverage means the inclusion of debt in the company's capital structure. Debt is used to…

Q: Define the value maximization of firm goal and describe the relationship between this goal and…

A: Value Maximization can be additionally characterized as investors value maximization. Since a…

Q: Evaluate how capital management pricing model may be utilised to assess the trade off between risk…

A: Introduction : In simple words, capital asset pricing model can be understood as the valuation model…

Q: Explain how current assets’ investment policies affect the firm’s risk and return trade-offs.

A: Current assets for a company are all those assets that are readily available for the conversion into…

Q: Explain what Return on Assets (ROA) measures? Will two firms with the same EBIT have the same ROA?

A: Return on assets is a measure used by companies to analyse how effectively assets of the business…

Q: What kind of model is often used by the investment companies?

A: INTRODUCTION Investment companies are those companies which provide advisory services to their…

Q: How do profit potential and legal considerations affect a firm’scredit policy?

A: It refers to the policy which states interest rate and duration that are relevant to the funds…

Q: Describe its significance along with the characteristics that determine the quality of a market?

A: A financial market is a market where people buy or sell financial securities at a low transaction…

Q: Based on the assumption efficient capital market is characterized by rationality and risk aversion,…

A: When a business attempts to maximize the wealth of their firm, they are really attempting to build…

Q: What critical success factors should all investment films involved in stockbroking and asset…

A: Asset management involves the practice of collecting, maintaining, and trading investments with the…

Q: Explain briefly what working capital and working capital management are and what they do. Explain…

A: The financial Ratios will be calculated by taking the numerical values that are taken from the…

Q: What is/are the importance of identifying the gaps to make financial projection feasible?

A: A gap analysis is a method for comparing present performance to desired, expected performance. This…

Q: financial

A: Financial leverage refers to money that is borrowed in order to buy assets for the company with the…

Q: Discuss the concept of WACC, the required rate of return, and risk assessment (and explain how they…

A: Risk management is everywhere in finance. This happens when an investor buys US government bonds…

Q: How would you describe the services provided by the investment advisory firms and portfolio…

A: Investment advisory firms and portfolio management companies are the important parts of investment…

Q: Discuss in what ways the operating, investing and financing cash flows of a growing firm might be…

A: A statement of cash flows is a financial statement showing how changes in balance sheet accounts and…

Q: The wealth maximization objective of a firm is superior to its profit maximization objectives.Do you…

A: The primary objective of every firm is to maximize its profit. Wealth maximization is the broader…

Q: In theory, should a firm be equally concerned with stand-alone,corporate, and market risk? Would…

A: Introduction: Risk can be characterised in terms of the uncertainty of future consequences resulting…

Q: What are some limitations of financial performance measures?

A:

Q: What is the risk in the context of financial decision making and performance?

A: Financial decision making: Financial decision making denotes to decision making concerning financial…

Q: Distinguish between different levels of financial market efficienc

A: Financial marketing efficiency measures how quickly the price of an individual asset gives…

Q: When do liquidity management solutions deliver maximum value to the firm?

A: Liquidity management is an important aspect of treasury management. Essentially treasury management…

Q: Explain in detail why company valuation is influenced by capital structure decisions.

A: Capital structure of a company shows how has the company raised its capital. A company's capital…

Q: consider ethical implications of financial reporting and how it relates to acquiring additional…

A: Ethical implication of financial reporting mainly concerns with the numbers that are being reported…

Q: How financial synergy impact the firm's value

A: Financial Synergies: Financial Synergy happens at the joining of two businesses increases financial…

Q: What is the difference between future value and present value? Which approach is generally preferred…

A: Present value and future value are considered while taking investment decisions. The future values…

Q: Which are functions of financial markets? Check all that apply: O Maturity intermediation Risk…

A: Financial markets are important in the economy of country and they play very bigger role in the…

Q: What is Hedging principle and how it can be used to manage the working capital of the firm?

A: Investment in current assets has been used to fund the company's working capital requirements.…

Q: Should a firm’s managers help investors improve their estimates of the firm’s intrinsicvalue?…

A: Introduction: Intrinsic value is nothing but the stock’s approximate market worth, extracted from…

Q: Discuss how financial risk management enables a firm to increase its value

A: The process of discovering, assessing, and controlling threats to an organization's capital and…

Q: Which of the following would be most difficult to assess? Select one :- a. the liquidity position of…

A: The liquidity position of a firm can be easily assessed through liquidity ratios like : current…

Q: How does risk management affect a company’s ability to finance its projects?

A: Risk is associated with every business; there are some risks which are controllable by the…

Flow of Funds

The flow of funds is the financial accounts of the nation, which monitor and control the cash flow among various sectors or industries, or markets. Central banks use these flow of funds statements to acquire macroeconomic data, to publish cash inflow and cash outflow statements of the nation. This flow of funds system is utilized to identify economic activity and changes in the economy. It is used by Federal Reserve to determine the Gross Domestic Product (GDP) of the nation and to implement monetary policy and fiscal policies.