1. Profits represent money that can be spent, and as such, form the basis for determining the value of financial decisions. 2. Cash flows and profits are synonymous; in other words, higher cash flows equal higher profits. 3.Managers should not be concerned with business ethics because ethical behavior is inconsistent with the primary goal of maximizing shareholder value. 4. The risk/return trade-off implies that the return on a riskless asset must be zero