Questions from Financial Management

Q: List and discuss briefly the major components of a firm’s financial plan

List and discuss briefly the major components of a firm’s financial plan. What role do projections of financial statements play in the development of the financial plan?

Q: A major component of financial planning is to forecast future financial statements

A major component of financial planning is to forecast future financial statements. If you had a company’s balance sheets and income statements for the past 5 years but no other information, how could...

Q: Define each of the following terms: a. Project cash

Define each of the following terms: a. Project cash flow; accounting income b. Incremental cash flow; sunk cost; opportunity cost; externality; cannibalization; expansion project; replacement project...

Q: Why is corporate governance important to investors? Explain how each of

Why is corporate governance important to investors? Explain how each of the following is related to corporate governance: (a) management entrenchment, (b) hostile takeovers, (c) incentive compensat...

Q: Define the following terms and then explain the role they might play

Define the following terms and then explain the role they might play in your forecast. (a) Economies of scale. (b) Lumpy assets. (c) Excess capacity.

Q: The funds requirement can be forecasted by the forecasted financial statement approach

The funds requirement can be forecasted by the forecasted financial statement approach, but you could also use the AFN formula. What is this formula, and how does it operate? What are its advantages a...

Q: What is an agent and what is a principal? What kinds

What is an agent and what is a principal? What kinds of situations in companies give rise to conflicts between these two, called agency conflicts?

Q: Managers of corporations don’t always take actions that are in the best

Managers of corporations don’t always take actions that are in the best interest of the corporation’s owners. What are some of those actions, and how can corporations structure the management contract...

Q: What are some of the pros and cons of using stock

What are some of the pros and cons of using stock options to compensate managers?

Q: How have events such as the accounting frauds at AIG, Enron

How have events such as the accounting frauds at AIG, Enron, WorldCom, and several other companies affected people’s ideas about corporate governance, the government’s role in corporate governance, an...