Ch 1 · Scope & Objectives of Financial Management

📘 Core concepts

1. 1Functions: Investment (capital budgeting), Financing (capital structure), Dividend (payout policy), Working Capital.
2. 2Profit maximisation vs Wealth maximisation — wealth (NPV) is the goal.
3. 3Time value of money is foundational concept.
4. 4Agency relationship — costs to align managers with shareholders.
5. 5Financial decisions interact: investment & financing affect each other (M&M, Modigliani-Miller).