What Is the Principal Guiding Factor for the Financial Manager

question 45

Essay

What is the principal guiding factor for the financial manager of a firm?

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Definitions:

Future Cash Flows

Estimated streams of future financial income or expenditure, related to investments, projects, or business operations.

Rate of Return

A measure of the profitability of an investment, expressed as a percentage of the original investment.

Present Value

The present valuation of money expected in the future or cash inflow sequences, with adjustments for a predetermined rate of return.

Security's Value

The market worth or price at which a financial security, such as a bond or stock, can be bought or sold.