alleryStart learning →What is the main goal of the financial manager?
ATo maximize the value of the firm to its owners
BTo maximize the sales the firm makes each year
CTo minimize the taxes the firm pays each year
DTo minimize the number of employees on payroll
Answer & Solution
Correct answer: A. To maximize the value of the firm to its owners
1. The main goal of the financial manager is to maximize the value of the firm to its owners.
2. Every planning, investment and financing decision is judged against that goal.
3. Reaching it means weighing both short-term and long-term consequences of the firm's actions.
4. Cutting taxes or headcount may serve the goal or damage it, so neither can be the goal itself.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 16 "Understanding Financial Management and Securities Markets", section 16.1 The Role of Finance and the Financial Manager_
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