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1. We won't take on additional risk unless we expect to be compensated with additional return.

Ri = Rf + bi(Rm - Rf) <= Capital Asset Pricing Model

2. A dollar received today is worth more than a dollar received in the future.

3. Cash, not profit, is king!

Value of asset = Present value of expected future cash flows it will generate!

4. Incremental Cash Flows: It's only what changes that counts

5. The Curse of Competitive Markets.

6. Capital Markets quickly reflect new information as changes in prices

7. Managers won't work for owners unless it is in their best interest

8. Taxes Bias Business Decisions

9. All risk is not equal. Some risk can be diversified away and some can not.

10. Ethical Behavior

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Q: What are the 10 axioms of financial management?
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