Durant's Approach to Capital Structure

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Questions and Answers

What is the primary objective of financial decisions in a business firm?

  • To minimize costs
  • To maximize profits
  • To increase market share
  • To maximize shareholders' wealth (correct)

What type of investment decision is concerned with the selection of assets in which funds will be invested?

  • Long-term investment decision (correct)
  • Short-term investment decision
  • Dividend decision
  • Financing decision

What is the term for the value of capital assets available for production purposes at a given point in time?

  • Gross fixed capital formation
  • Fixed capital (correct)
  • Capital budgeting
  • Working capital

What is the process of evaluating and selecting projects to invest in, called?

<p>Capital budgeting (D)</p> Signup and view all the answers

What is the primary concern of financial management in a business firm?

<p>Procurement of funds (A)</p> Signup and view all the answers

What is the term for the decision related to financial matters of a business firm?

<p>Financial decision (D)</p> Signup and view all the answers

What is the main goal of investment decisions in a business firm?

<p>To maximize returns on investment (C)</p> Signup and view all the answers

What is the term for the investment of funds in short-term assets?

<p>Short-term investment (A)</p> Signup and view all the answers

What is the process of evaluating and selecting projects to invest in, based on?

<p>Capital budgeting (A)</p> Signup and view all the answers

What is the primary focus of financial management in a business firm?

<p>Management of funds (B)</p> Signup and view all the answers

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