1. Give three broad types of decisions that a financial manager makes
2. Explain what is meant by the term “information asymmetry”.
3. What main financial objective does the theory of company finance assume that a business organisation has?
4. Explain the concept of economic value added (EVA) .
5. Which of the following are examples of financial objectives that a company might choose to pursue?
(a) Provision of good wages and salaries
(b) Restricting the level of gearing to below a specified target level
(c) Dealing honestly and fairly with customers on all occasions
(d) Producing environmentally friendly products
6. Calculate the economic value added from the following information:
A company has reported operating profits after tax of N$70 million. The company’s investments amounts to N$600 million and its after tax cost of financing is 9%.
7. Suggest three ways of overcoming the agency problem.
8. Explain why a company may have a positive accounting profit and a negative EVA?