Stakeholders and Conflicting Objectives - Finance and Management Theory
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Questions and Answers

Which of the following is NOT a factor that can influence the needs of owners/shareholders?

  • Attitude towards risk
  • Balance between income and capital growth needs
  • Time preference and consumption needs
  • Compliance with industry regulations (correct)

    • What is the opportunity cost of capital in the context of financial decision-making?

  • The potential benefits forgone by not investing in the best alternative (correct)
  • The cost of complying with corporate governance regulations
  • The cost of maintaining existing operations
  • The cost of financing a project from external sources

    • Which of the following is NOT a responsibility of managers/directors as mentioned in the text?

  • Maximizing shareholder wealth at all costs (correct)
  • Respecting and abiding by rules and regulations
  • Considering ethical considerations and corporate governance
  • Carrying out their work with due diligence

    • What can affect the patterns of future cash flows for a company?

    <p>The operational financial decisions made by the company</p> Signup and view all the answers

    What is the significance of calculating the Net Present Value (NPV) for projects with different cash flows?

    <p>To evaluate the project's potential for generating positive cash flows</p> Signup and view all the answers

    Which of the following is NOT mentioned as a responsibility or consideration for managers/directors in the text?

    <p>Maximizing profits for shareholders</p> Signup and view all the answers

    What is the primary concern regarding financial reporting for managers/directors?

    <p>Regulating financial reporting is an integral and important aspect</p> Signup and view all the answers

    Which of the following stakeholders' interests are NOT directly mentioned in the text?

    <p>Creditors</p> Signup and view all the answers

    According to the contractual theory mentioned in the text, what is the primary responsibility of managers/directors?

    <p>Carrying out their work with due diligence and ethical considerations</p> Signup and view all the answers

    Which of the following is NOT a factor that can influence the needs of providers of finance (shareholders) according to the text?

    <p>Compliance with environmental regulations</p> Signup and view all the answers

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