1.3 Managerial Finance Function

In what financial activities does a corporate treasure engage? Treasurer(Chief Financial Manager) Typically manages the firm’s cash, investing surplus funds when available and securing outside financing when needed. Also, the treasurer oversees a firm’s pension plans and manages critical risks related to movements in foreign currency values, interest rates, and commodity prices. The duties tend to be more external.
What is the primary economic principles used in managerial finance? The primary economic principle used in managerial finance is marginal cost-benefit analysis, the principle that financial decisions should be made and actions taken only when the added benefits exceed the added costs. Nearly all financial decisions ultimately come down to an assessment of their marginal benefits and marginal costs.
What are the major differences between accounting and finance with respect to emphasis on cash flow and decision making? 1. Emphasis on Cash Flows(Accounting-Accrual Basis vs. Financial Manager-Cash Emphasis)2. Decision Making (Accounting-Collection and presentation of financial data vs. Financial Manager-Evaluation of the data collected to make decisions)
What are the two primary activities of the financial manager that are related to the firm’s balance sheet? Primary activities are making investments and financing decisions, Investment decisions determine what type of assets the firm holds. Financing decisions determine how the firm raises money to pay for the assets in which it invests.

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