CS Executive · Corporate Accounting and Financial Management · Introduction to Financial Management
Which of the following best describes the three core decisions that make up the scope of financial management in a company?
The scope of financial management covers investment, financing and dividend decisions. These respectively decide where funds are deployed, how they are raised, and how profits are divided between shareholders and retained earnings. The other listed groups relate to operations, marketing or compliance functions.
- AInvestment, financing and dividend decisionsCorrect
- BProduction, marketing and personnel decisions
- CPurchasing, storage and sales decisions
- DAuditing, taxation and reporting decisions
Explanation
Financial management deals with how funds are invested in assets (investment decision), how they are raised (financing decision) and how profits are shared or retained (dividend decision). The other options describe functional areas of operations, marketing, or compliance rather than the finance function.
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