Which of the following questions are addressed by financial managers?

I. How should a product be marketed?

II. Should customers be given 30 or 45 days to pay for their credit purchases?

III. Should the firm borrow more money?

IV. Should the firm acquire new equipment?

Question

Which of the following questions are addressed by financial managers?

I. How should a product be marketed?

II. Should customers be given 30 or 45 days to pay for their credit purchases?

III. Should the firm borrow more money?

IV. Should the firm acquire new equipment?

BlackTom AI · Accepted Answer

Financial managers focus on investment, financing, and working-capital decisions—so classify each statement against those functions.

Relevant concepts:
- Capital budgeting (investment decision): evaluating long-term assets and whether to acquire equipment (use NPV, IRR, payback).
- Financing (capital structure): deciding whether to borrow, how much, and debt vs equity.
- Working-capital management: managing current assets/liabilities, including accounts receivable and credit terms.
- Marketing decisions (product promotion/positioning) are typically the responsibility of marketing management, though finance may provide input on budgets and profitability.

Step-by-step reasoning for each statement:
I. How should a product be marketed?
- This is marketing strategy: pricing, promotion, distribution—primary responsibility of marketing. Finance may review cost/profitability but does not set marketing tactics. Therefore I is not a core financial manager question.

II. Should customers be given 30 or 45 days to pay for their credit purchases?
- This is a credit policy decision affecting accounts receivable, cash flow, and working capital. Financial managers analyze trade-offs: longer terms may increase sales but raise carrying costs and bad-debt risk. This squarely falls under working-capital management, so II is a financial question.

III. Should the firm borrow more money?
- Directly concerns financing decisions and capital structure. Financial managers evaluate cost of debt, leverage, and impact on risk and return. III is clearly financial.

IV. Should the firm acquire new equipment?
- Capital budgeting: assess expected cash flows, compute NPV/IRR, and decide on the investment. Financial managers lead or heavily participate. IV is financial.

Why the correct answer is correct:
- II, III, and IV correspond to working-capital, financing, and investment decisions—core financial management duties. I is primarily marketing.

Why other options are incorrect:
- "I and IV only": excludes II and III, both financial matters—incorrect.
- "II and III only": omits IV, which is a capital-budgeting decision—incorrect.
- "I, II, and III only": wrongly includes I and omits IV—incorrect.
- "I, II, III, and IV": incorrectly includes I as a financial-manager question.

Conclusion: The correct choice is "II, III, and IV only," which matches the provided answer.

Which of the following questions are addressed by financial managers? I. How should a product be marketed? II. Should customers be given 30 or 45 days to pay for their credit purchases? III. Should the firm borrow more money? IV. Should the firm acquire new equipment?单项选择题

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