You are a manager who work at finance department of ANZ Corporation in Malaysia. You are...

You are a manager who work at finance department of ANZ Corporation in Malaysia. You are interested to analyse the core principles of finance that influence your company’s financial figures. Explain any FIVE (5) principles of finance that give significant impacts to your decision making process in order to achieve the desired financial performance for year 2020.

Expert Solution

Following are the five principles of finance that influence company's financial figures are:

i)Principle of risk and return:This principle suggest that the potential return rises with an increase in risk.As a finance manager you should understand how to calculate the riskiness of an investment so that you can make a sound financial decision to achieve the desired result.

ii)Time value of money:This principle suggest that value of money decreased when time passes.So before investing or taking funds,you as a finance manager think about inflation rate of the economy and the required rate of return must be more than the inflation rate so that return can compensate for the loss incurred by the inflation.

iii)Hedging:THis principle suggest that you should take a loan from appropriate source.For example:for short term requirement we have to arrange finance from short term sources and for long term requirement we have to manage fund from long term source.

iv)Diversity:Diversity help in minimizing the risk of by creating optimum portfolio.This principle suggest that investors should invest in risk free investment and some risky investment so that final risk can be lower.

v)Profitability and liquidity:Liquidity refers to marketability of the investment.

jeff jeffy answered 1 year ago

You are a manager who works in the finance department of ANZ Corporation in Malaysia.

You are a manager who works in the finance department of ANZ Corporation in Malaysia. You are interested to analyse the core principles of finance that influence your company’s financial figures. Explain any FIVE (5) principles of finance that give significant impacts to your decision making process in order to achieve the desired financial performance for the year 2020 (25 marks for this question).Write Any FIVE of thisPrinciple 1 The Risk -Return trade offPrinciple 2 The time value of MoneyPrinciple...

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You are a manager who works in the finance department of ANZ Corporation in Malaysia. You are interested to analyse the core principles of finance that influence your company’s financial figures. Explain any FIVE (5) principles of finance that give significant impacts to your decision making process in order to achieve the desired financial performance for the year 2020 (25 marks for this question).

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