Autumn 2005 - TBS 907 - Tutorial 1

Autumn 2005 - TBS 907 - Tutorial 1 - TBS 907 - Autumn 2005...

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TBS 907 - Autumn 2005 TUTORIAL 1 1) What is the goal of financial management? 2) What are some of the shortcomings of the goal of profit maximization? 3) Show that the three key decisions that a financial manager makes are interrelated? 4) What factors determine whether managers act in the best interests of shareholders? 5) Suppose you were the financial manager of a not-for-profit business ( a not-for-profit charity, perhaps). What kind of goals do you think would be appropriate? 6) Evaluate the following statement: “Managers should not focus on the current share value because doing so will lead to an overemphasis on short-term profits at the expense of long-term profit.” 7) Can our goal of maximizing the value of shares conflict with other goals, such as avoiding unethical or illegal behaviour? In particular, do you think subjects like customer and employee safety, the environment, and the general good of society fit in this framework , or are they essentially ignored? Try to think of some specific scenarios to illustrate your answer. 8) Howell Pharmaceuticals has been through a tough period due to falling demand for its products. However, Peter Howe, the chief chemist, claims to have invented a revolutionary new drug which doubles life expectancy and is even environmentally
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This note was uploaded on 07/10/2009 for the course FIN FIN taught by Professor Dr. during the Spring '09 term at Baptist College of Health Sciences.

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Autumn 2005 - TBS 907 - Tutorial 1 - TBS 907 - Autumn 2005...

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