TRUE OR FALSE. ________1.For so long as profit levels are high, no external borrowing will be required. ________2. Risks considerations suggest the acquisition of more current assets, but return consideration would imply less holdings of such assets. ________3. The cost of holding cash is the opportunity cost of returns from alternative uses. ________4. A primary objective of cash discounts is to accelerate payments for purchases of customers. ________5. Efficient management of cash suggests that a business firm should invest its idle cash in securities that provide maximum return.

1. Working Capital is considered the heart of a business. Why?

2. One of the potential conflicts between managers and owners of the firm is that managers may supplant the stated goals of the owner with some of their own. Do you agree? Why or why not?

3. There are four (4) types of financial management decisions: Financing decision, investment decision, Dividend decision, and Working Capital decision. Among the 4 decisions, what do you think is the most significant in achieving the objective of maximizing the value of the firm?

4. What is the importance of financial management in our daily life?