Question Tag: Non-financial objectives

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FM – May 2021 – L3 – Q3 – Ethical Issues in Financial Management

Discuss non-financial and ethical issues affecting financial objectives and outline financial objectives in not-for-profit organizations.

Question:

a. Discuss and provide examples of the types of non-financial, ethical, and environmental issues that might influence the objectives of companies. Consider the impact of these non-financial, ethical, and environmental issues on the achievement of primary financial objectives such as the maximisation of shareholder wealth. (12 Marks)

b. Discuss generally, the nature of the financial objectives that may be set in a not-for-profit organisation such as a charity or a hospital. (8 Marks)

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FM – Nov 2020 – L2 – Q1a – Introduction to Financial Management

Advise on non-financial objectives and risks associated with seabed mining.

Demo Gold is a Ghanaian mining company that has been operating on-land deep pit gold mining in Africa since its incorporation. Aiming at increasing the value of shareholders, the directors have signed an agreement with the governments of Tonga and Tuvalu to begin excavating an area of seabed in the Pacific Ocean for ores of copper, gold, and other valuable metals.

The idea of mining mineral deposits in the seabed has for many decades been considered unrealistic because of engineering challenges. However, the recent boom in offshore oil and gas operations has come with it the development of a few advanced deep sea technologies which can be used in mining mineral deposits in the seabed.

Required:

i) It appears that the sole objective of the seabed mining operation is to maximize the value of shareholders. Advise the directors on FOUR (4) non-financial objectives that Demo Gold should pursue to achieve a sustainable increase in shareholder value. (4 marks)

ii) Advise the directors of Demo Gold on THREE (3) likely sources of risk relating to the seabed mining operation. For each point, suggest a way through which the risk could be avoided or minimized. (6 marks)

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FM – NOV 2016 – L2 – Q1 – Introduction to Financial Management

Explains the agency problem in public companies, practical solutions, non-financial objectives, governance conflict solutions, and internal hedging methods.

a) Explain the term Agency problem in relation to a Public Limited Liability Company? (2 marks)

b) As a Finance expert, explain THREE practical steps to manage agency problem in public limited liability companies. (3 marks)

c) Profit maximization is the core objective of shareholders in Public limited Liability Companies. Identify and explain THREE other non-financial objectives that can be pursued by a Public limited liability Company. (3 marks)

d) Shareholders are risk-takers but Directors are risk-averse. Explain THREE approaches that corporate governance has identified for addressing conflict of interest between shareholders and Directors. Reference can be made to Companies Act 1963, (Act 179) (6 marks)

e) Explain THREE internal hedging methods that a company can use in order to minimize translation risk and transaction risk. (6 marks)

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FM – Nov 2017 – L2 – Q1a – Introduction to Financial Management

Explain four non-financial objectives of private companies and their effect on financial objectives.

Directors usually want to focus on factual matters and concrete actions. They deal with rules, regulations, and compliance standards to ensure adherence to the law. They mostly measure company’s performance in financial terms with secondary consideration of other metrics.

i) Briefly explain and identify FOUR examples of non-financial objectives of private companies. (6 marks)
ii) Discuss and identify examples of the effect of these non-financial objectives on the achievement of the financial objectives of companies. (4 marks)

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FM – May 2021 – L3 – Q3 – Ethical Issues in Financial Management

Discuss non-financial and ethical issues affecting financial objectives and outline financial objectives in not-for-profit organizations.

Question:

a. Discuss and provide examples of the types of non-financial, ethical, and environmental issues that might influence the objectives of companies. Consider the impact of these non-financial, ethical, and environmental issues on the achievement of primary financial objectives such as the maximisation of shareholder wealth. (12 Marks)

b. Discuss generally, the nature of the financial objectives that may be set in a not-for-profit organisation such as a charity or a hospital. (8 Marks)

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FM – Nov 2020 – L2 – Q1a – Introduction to Financial Management

Advise on non-financial objectives and risks associated with seabed mining.

Demo Gold is a Ghanaian mining company that has been operating on-land deep pit gold mining in Africa since its incorporation. Aiming at increasing the value of shareholders, the directors have signed an agreement with the governments of Tonga and Tuvalu to begin excavating an area of seabed in the Pacific Ocean for ores of copper, gold, and other valuable metals.

The idea of mining mineral deposits in the seabed has for many decades been considered unrealistic because of engineering challenges. However, the recent boom in offshore oil and gas operations has come with it the development of a few advanced deep sea technologies which can be used in mining mineral deposits in the seabed.

Required:

i) It appears that the sole objective of the seabed mining operation is to maximize the value of shareholders. Advise the directors on FOUR (4) non-financial objectives that Demo Gold should pursue to achieve a sustainable increase in shareholder value. (4 marks)

ii) Advise the directors of Demo Gold on THREE (3) likely sources of risk relating to the seabed mining operation. For each point, suggest a way through which the risk could be avoided or minimized. (6 marks)

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FM – NOV 2016 – L2 – Q1 – Introduction to Financial Management

Explains the agency problem in public companies, practical solutions, non-financial objectives, governance conflict solutions, and internal hedging methods.

a) Explain the term Agency problem in relation to a Public Limited Liability Company? (2 marks)

b) As a Finance expert, explain THREE practical steps to manage agency problem in public limited liability companies. (3 marks)

c) Profit maximization is the core objective of shareholders in Public limited Liability Companies. Identify and explain THREE other non-financial objectives that can be pursued by a Public limited liability Company. (3 marks)

d) Shareholders are risk-takers but Directors are risk-averse. Explain THREE approaches that corporate governance has identified for addressing conflict of interest between shareholders and Directors. Reference can be made to Companies Act 1963, (Act 179) (6 marks)

e) Explain THREE internal hedging methods that a company can use in order to minimize translation risk and transaction risk. (6 marks)

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FM – Nov 2017 – L2 – Q1a – Introduction to Financial Management

Explain four non-financial objectives of private companies and their effect on financial objectives.

Directors usually want to focus on factual matters and concrete actions. They deal with rules, regulations, and compliance standards to ensure adherence to the law. They mostly measure company’s performance in financial terms with secondary consideration of other metrics.

i) Briefly explain and identify FOUR examples of non-financial objectives of private companies. (6 marks)
ii) Discuss and identify examples of the effect of these non-financial objectives on the achievement of the financial objectives of companies. (4 marks)

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