Which one of the following best matches the primary goal of financial management? Increasing the dollar amount of each sale Increasing traffic flow within the firm's stores Transforming fixed costs into variable costs Increasing the firm's liquidity Increasing the market value of firm

Increasing the market value of firm.

Explanation:

Primary goal is to maximize the long term wealth of the company's shareholders by increasing the market value (price) of their shares.

Management can encourage an increase on share price by earning an attractive return on an acceptable level of risk.

There are three equivalent goals of financial management:

-maximize shareholder wealth

-maximize share price

-maximize firm value

-or: to maximize the current value per share of existing stock (note: for the stock price to be an accurate measure of the financial manager's performance, we need capital markets to do their pricing job correctly - we need capital markets to be efficient. In an efficient capital market, all available information is incorporated into stock prices, and thus what the financial manager knows, the shareholders know it, too).