Answer True or False. Briefly explain the false ones 8. Taxes are a government r
ID: 2784195 • Letter: A
Question
Answer True or False. Briefly explain the false ones 8. Taxes are a government regulation against the objectives of managerial finance. 9. In the mercantile societies the owners are called shareholders. 10. An increase in assets constitutes a use of funds. 11. The economic cycle is a social and cultural phenomenon 12. We as employees, one of our missions is to make the business owners, richer. 13. The "Stagflation" was an economic phenomenon in which inflation and recession combined 14. To make the owners richer it is important to properly manage the business so that the value in the stock market increases.Explanation / Answer
1) Taxes are government regulation against the objectives of managerial finance. ---- False
The objective of managerial finance is to maximise profits and the payment of taxes is done from the profits. So, one may feel that the purpose of collecting taxes is to limit the amount of profit that is earned by a company. But it is not true. Taxes are collected by the government to meet the expenditure that it has to provide to the citizens in general. All government services are not charged. Hence, taxes are collected and used for such government services. It has nothing to do with going against the objectives of managerial finance.
2) In a mercantile society, owners are called shareholders. ----- False
There are no shareholders in a mercantile society. It deals with merchants
3) An increase in assets constitutes use of funds. ----- True
An increase in asset like stock of raw materials is due to use of funds. In other words, funds are used to purchase the asset that leads to increase in assets.
4) The economic cycle is a social and cultural phenomenon. ----- False
Economic cycle is a phenomenon that is based on the economic or business activities of a country. It is not a socio-cultural phenomenon.
5) We, as employees, one of our mission is to make business owners richer. ---- True
The aim of any business is to maximise the wealth of the shareholders. The shareholders have a right of ownership of the business. Hence they can be considered as business owners. Thus, the mission of the employees is to make the business owners richer.
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