Explain the principle of increasing financial risk and why it is important when assessing the financial and economic merits of a business

Q: In the real world, what are the main challenges that a Finance Manager faces while trying to run a…

A: The accounting and finance industry is not an exception to how swiftly the corporate landscape…

Q: Explain when diversification is an effective business strategy.

A: Diversification, simply, means to increase profit by higher sales through a new variety of products…

Q: a. Sales Maximization b. Asset Maximization c. Profit Maximization d. Wealth Maximization

A: Time value of money is a technique used to find the worth of money today, but that money is to be…

Q: How is it possible for a firm to grow itself out of business and how can this be guarded against as…

A: Finance managers are accounting experts concerned for a company or organization's financial…

Q: A process that create a financial position that offsets the risk of an ongoing business process is…

A: Transfer of risk: Transfer of risk is one the strategy for risk management. This involves transfer…

Q: Why is it important for entrepreneurs to konw the principles of financial management?

A: Financial management is a major task for holders and corporate managers. The possible effects on…

Q: Give an example of how a business might evaluate investment opportunities to ensure that their…

A: Financial Management: Financial management is defined as the efficient and effective management of…

Q: Provide an example of how a business might evaluate investment options to ensure that their…

A: Here Is The Answer :

Q: 1. How are the capital market line and security market line similar?  How are they different?

A: Note : As per the bartelby guidelines only first question will be answered.    Similarities in…

Q: How can a small-business owner or corporate manager use financial leverage to improve the firm’s…

A: A business decides its capital structure in a way that gives less cost of capital.

Q: goal of financial management is to maximize the shareholders' value. What are the pros and cons o

A: Basic objective of financial management is to increase the value of shareholders and to increase the…

Q: What are the possible actions that a firm can take if it experiences a financial failure?

A: Financial failure of the firm could be resulted because of overspending, higher degree of illiquid…

Q: to consider the so-called corporate social responsibilities in making inve

A: Investment decisions relate to how a business's funds areallocated among various assets for the…

Q: b. Financial Management means planning, organizing, directing and controlling the financial…

A: Risk management refers to the process of identifying, analysing, and accepting or mitigating risk in…

Q: How can you estimate the business risk of a firm?

A: Beta is the systematic risk. As a company opts to make decision to the best of interest, it is…

Q: Explain how accouning principles are used to analyze a business’s financial health ,What accoun!ng…

A: Financial Analysis based on principles of accounting includes both analysis and interpretation. An…

Q: Critically examine the role of finance manager in the modern business organizations.

A: Managing all the financially performances of the organizations are in the hand of a financial…

Q: what are real world issues and problems faced by the financial managers

A: Financial manager is more precisely responsible for procurement of funds at effective cost and…

Q: What is NOT a question that needs to be answered when completing financial due diligence? A. Is…

A: Financial due diligence is an integral part of the merger and acquisition process. It states that…

Q: “Financial reporting plays a key role in facilitating informed business decision making and…

A: Financial reporting refers to the financial results and financial statements of a company or an…

Q: Does it ever make sense for a profitable company with positive cash flow to seek external financing?…

A: External financing is any kind of business funding you acquire from sources outside the company.…

Q: h one is correct please confirm? QUESTION 22 In considering financial planning, the type of…

A: Strategic planning is a process wherein direction of a business is provided by establishing a proper…

Q: What is business risk? What factors influence afirm’s business risk?

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

Q: Explain how a financial manager can, in practice, maximize the wealth of shareholders.

A: Answer

Q: Do firms need to consider the so-called corporate social responsibilities in making investment…

A: This is a primary responsibility of a Corporate house to returning to society.  Corporate social…

Q: Analyze the importance and scope of financial management in wealth maximization of an organization…

A: Financial management (FM) means managing the funds. It basically deals with two things: How to…

Q: Predicting budgets, cash flows, and financial health may avail investors and companies to investment…

A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: Which of the following best describes the potential impact of business risk on Earnings Quality?…

A: Earnings Quality: The earnings quality or quality of earnings refers to the reliability with which a…

Q: Some may argue that a company’s financial bottom line is all important. Comment on this from the…

A: Definition: Balance scorecard: Balance scorecard is the technique used by the management to evaluate…

Q: Why use a business risk approach?

A: Business risk is generally identified by the Auditor. By reviewing the financial statements Auditor…

Q: Based on your understanding, expound the role of a financial manager in financing, investing, and…

A: Financial management is a study and practice of how to manage the funds of a company acquired either…

Q: What unique problems do not-for-profit businesses encounter in financial analysis and planning? What…

A: Financial analysis: Financial analysis is a common method used by financial managers to access the…

Q: What are some of the measures used to evaluate the financial stability of a company?

A: When a firm pays off all its expenses, liabilities and is running smoothly with bright future…

Q: What are the main implications of financial risk associated with the company?

A: There are various types for financial risk which are associated with the company such as: 1) Market…

Q: What is the relationship of business risk, financial risk, and stand-alone risk? How to calculate…

A: Risk refers to the proportion of uncertainty arising as a potential financial loss inherent while…

Q: Evaluate the various risk financing mechanisms available to businesses.

A: Risk financing is a set of policies aimed at shifting fund mobilization away from unorganized…

Q: In finance, the term risk management involves identifying the potential risks the organization may…

A: The practice of identifying, evaluating, and implementing investment decisions depending on…

Q: What are the main hindrances in valuation estimates in business valuati

A: Knowing how much an asset is worth and what factors influence its value is essential for making…

Classification Of Risk

Risk means when there could be a possibility that the returns expected from a particular project or investment may or may not match the investor's expectations. In other words, the uncertainty of an income arising from a source that would either be lower than expected or result in losses in risk exposure of the project. The higher the risk involved, the higher is the return expected by the investor as the investor is exposed to a high level of risk. There are various methods by which different types of risk can be assessed and avoided or mitigated.