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Which of the following statements is CORRECT? A . The intrinsic value of a firm is the sum of all future cashflows that the firm
Which of the following statements is CORRECT?
A The intrinsic value of a firm is the sum of all future cashflows that the firm generate.
B The financial manager's primary objective should be to attempt to maximize the firm's operating cost.
C Potential agency problems can arise between managers and stockholders, because managers hired as agents to act on behalf of the owners may instead make decisions favorable to themselves rather than the stockholders.
D The financial manager should choose the project that has the highest risk, assuming the amount and timing of cash flows between the projects.
E Large, publicly owned firms like IBM and GE are controlled by their management teams. As long as they stay within the law, there is no way to either force or motivate managers to act in the stockholders' best interests.
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