2 .( Set 2 ) Short-term finance deals with : acquiring and selling fixed assets . financing long-term projects . capital budgeting . 3 . For a firm to create value it must : avoid the issuance of debt securities . have a greater cash inflow from its stockholders than its outflow to them . avoid payments to the government so dividends can be increased . 3 .( Set 2 ) A stakeholder is any person or entity : owning shares of stock of a corporation . to whom the firm currently owes money . that initially started a firm and currently has management control over that firm . owning bonds or other long-term debt issued by a corporation . other than a stockholder or creditor who potentially has a financial interest in the firm . 4 . If a firm is currently profitable , then : its cash flows are known with certainty . its reported sales exceed its costs . the timing of the cash flows on proposed projects is irrelevant . it will always have sufficient cash to pay its bills in a timely manner . its current cash inflows must exceed its current cash outflows . 4 .( Set 2 ) Which one of these best fits the description of an agency cost ? increasing the dividend payments per share the benefits received from reducing production costs per unit the payment of interest on a firm ’ s debts the payment of corporate income taxes the payment required for an outside audit of the firm 5 . The primary goal of financial management is to : maximize current dividends per share of the existing stock . avoid financial distress . minimize operational costs and maximize firm efficiency . maximize the current value per share of the existing stock . maintain steady growth in both sales and net earnings . 6 . Which one of the following business types is best suited to raising large amounts of capital ? limited partnership corporation