Question 1.1 (15 marks) The management of a firms assets is not exclusively in the hands of a financial manager. Sincemost business decisions are measured in financial terms, personnel in all functional departmentsare, to a greater or lesser extent, involved in the financial decision making of the firm. Max at,el 2014. It is therefore important for them to have an understanding of the principles of financialmanagement. Required: Briefly analyse the following fundamental principles of financial management. The cost- benefit analysis The risk-return principle The time value of money principle

1.2 Briefly explain the agency problem and the associated risk posed by a financial manager to the corporate entity that it purports to serve and explain how you would remedy the agency problem?

1.3 (2 marks) Financial managers focus on the financial health of an organization and establish the possible financial consequences of making a business decision. With aid of example where necessary highlight the major difference between an investment decision and a financial decision in an organisation.