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Financial Management
of the Firm and
Investment Management
Introduction Learning Objectives
Key Financial Concepts After studying this chapter, you should be able to
Owners Versus Managers
1 Explain how financial managers fit
Accounting Profits Versus Economic into the organizational structure of a
Profits
firm and what their role is.
Role of the Financial Manager
2 Use the time value of money to
Time Value of Money and Interest Rates
differentiate between present values
Firm Financial Decision Making and future values of money.
Net Present Value and Capital Budgeting 3 Apply net present value analyses to
Decisions
the basic capital budgeting decisions
Sources of Funds and Financing Decisions facing financial managers.
Managing Cash Within the Firm
4 Identify the sources of funds and their
Matching Assets and Liabilities
usage in financing decisions.
The Role of Investment Managers 5 Describe different types of investment
Balancing Returns and Risks managers and the services they
Measuring Returns provide investors.
Counting the Risks 6 Give details of how to measure
Managing Investment Risks investment returns and what
Making Investment Choices investment risks confront investors.
7 Provide sound advice on how to
Careers in Financial and Investment
Management manage investment risks and make
investment choices.
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