Professional Documents
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TEST BANK
Relationship of Financial Objectives to Organizational Strategy
and Other Organizational Objectives
Multiple Choice Questions
1. Corporate social responsibility is
a. Effectively enforced through the controls envisioned by
classical economics.
b. The obligation to shareholders to earn a profit.
c. The duty to embrace service to the public interest.
d. The obligation to serve long-term organizational interest.
2. Which of the following statements is false?
a. Timing is a particularly important consideration in financial
decisions.
b. During the 1930s, the government assumed a much greater
role in regulating the securities industry.
c. Because socially desirable goals can impede profitability in
many instances, managers should not try to operate under
the assumption of wealth maximization.
d. As finance emerged as a new field, much emphasis was
placed on mergers and acquisitions.
3. Which of the following statements is true?
a. Social responsibility and profit maximization are synonymous.
b. There are more serious problems with financial goal of
maximizing the earnings of a firm.
c. Maximizing the earnings of the firm is the primary goal of
financial management.
d. The higher the profit of the firm, the higher the value of the
firm is assured of receiving in the market.
4. Which of the following statements is false?
a. For as long as satisfactory level of profit is earned, the
financial manager need not be concerned with unethical
behavior.
b. In the mid 1950s, finance began to change to more analytical,
decision-oriented approach.
c. Inflation has led to phantom profits and undervalued assets.
d. Recently, the emphasis of financial management has been on
the relationships between risk and return.
FINN 23
Financial Management, Principles and Applications
FINN 23
Financial Management, Principles and Applications
KEY ANSWERS
1. C.
Corporate social responsibility, often abbreviated "CSR," is
a corporation's initiatives to assess and take responsibility for the
FINN 23
Financial Management, Principles and Applications
FINN 23
Financial Management, Principles and Applications
13.
A.
Asset management may be referred to as the operating decisions
made by finance managers, which influences the day-to-day activities.
14.
D.
Refer to the meaning of CSR in answer #1.
15. D.
Wealth maximization focuses on the appreciation of the current value
per share, while the profit maximization on the other hand, is
concerned on the profit itself.