Chapter 2

Chapter 2

1.Free change flow and financial statements.

The primary clinical of the corporate management team is to maximize shareholder weath. The federations board of directors and the shareholders evaluate and review managerial actions found on the growth in the harbor of the whole.

A unattackables value depends on the positive net income revertd in the past.
True
False

A firms value depends on the firms ability to generate positive bullion flows now and in the future
True
False

When determine the value of a firm, which of the pastime statements is accepted?
Inversters are risk neutral. Other things touch on they take to pay more stocks that are less insecure and arrest uncertain silver flows
Investers love risk. Other things equal they pick to pay more for stocks that are more risky and induce uncertain cash flows.
Investors are risk averse. Other things equal they prefer to pay more for stocks that are less risky and that have relatively certain cash flows than other stocks.

When determining the value of a firm, which of the following statements is ture?
A financial plus is considered to have value if it has the ability to generate positive cash flows.




A financial asset is considered to have value if it is acquired at its market value
A financial asset is considered to have value if it is acquired a its book price.

When determing the value of a firm, which of the following statements is true?
The timing of cash flows a firm can generate is very authorized in determing the value of a firm. any else being equal, cash received sooner is better.
The timing of cash flows a firm can generate is very important in determing the value of a firm. All else being equal, cash received later is better.
The timing of cash flows a firm can generate is irrelevant in determing the value of a firm.

FCF= sales revenues-operating costs-Operation taxes
Will his calculation be an appropriate melodic theme of the FCF? No

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