Question 1: Short Theory Questions [01][3 marks x 2 = 10 marks] (Note: - Answer from Google site is unacceptable) 1-Draw and Label diagram explains a relation between Liquidity, profitability, and with the primary goal of financial management. 2- Why is the fixed asset riskier than current asset? Question 2: Long Theory Questions [01, 02] [10marks] Define the value maximization of firm goal and describe the relationship between this goal and financial decisions. Note: - (Answer from Google site is unacceptable) Question 3: [l-mark x 10 = 10 marks] State whether the following statements are true or false. 1) Within Corporation, one key value of limited liability is that it lowers owners' risks and thereby enhances a fimm's value. 2) Money markets are markets for short-term debt securities. 3) Negative net operating cash flow of firm means that the firm has solvency. 4) Agency Problem creates when managers are acting on behalf of owners 'interest. 5) Increase in current liabilities and decrease in current asset represents inflow cash. 6) If an individual investor buys or sells a currently outstanding stock through a broker, this is a primary market transaction. 7) Activity ratios explain the firm ability to use assets efficiently. 8) Trade-Off between Risk-Return is the main principle to maximize the firm value. 9) Reduce inventory and use the proceeds to pay off a part of current liabilities will lead to increase the quick ratio. 10) Unethical Behavior of the manager includes using the information that not available to the public to make money. Question 4 Mini case [01, 02] [3 marks x 2 = 10 marks] Referring to the following data of the Omani Company that extracted from the balance sheet at 31/12/2019 answer the following questions: - (Note: Write all Equations regarding the questions) 1. The company manager targets to reduce the current ratio in the year (2020) by 33% from the previous year (2019), this requiring downsizing the amount of the total current asset. To what level can the manager reduce the total current asset to achieve this target at (2020)? (Suppose the other things are fixed) 2. The manager put a plan to reduce the selling period in the (2020) by (16.7%) from the previous year (2019). Calculate the new inventory tumover. (Suppose the other things are fixed) Data of 2019 2 Times Total Asset Tumover Net Fixed Asset Total Liabilities 400 (Thousand OMR) 400 (Thousand OMR) 2000 (Thousand OMR) 1.5 Times Sales Quick Ratio Accounts Receivable 150 (Thousand OMR) 200 (Thousand OMR) Long-term Liabilities