Fin 571
- Submitted by: paparazzi45
- Views: 477
- Category: Other
- Date Submitted: 03/17/2014 06:52 PM
- Pages: 7
- Report this Essay
Bussiness Regulation Simulation
Felix Tapia
University of Phoenix
Puerto Rican Business Law – LAW/531PR
Israel Camacho Alicea
June 4, 2013
Financing decisions determine how a firm will raise capital. Examples of financing
decisions include securing a bank loan or selling debt in the public capital markets.
Capital budgeting involves deciding which productive assets the firm invests in, such
as buying a new plant or investing in the renovation of an existing facility.
Financial managers should select a capital project only if the value of the projects
expected future cash flows exceeds the cost of the project. In other words, firms
should only make investments that will increase their value, and thus increase the
stockholders’ wealth. Working capital management is the day-to-day management
of a firm’s short-term assets and liabilities. Working capital can be managed by
maintaining the optimal level of inventory, managing receivables and payables,
deciding to whom the firm should extend credit, and making appropriate investments
with excess cash. The answer that does not pertain to corporations is: c. Are the
easiest type of business to form. The three main components of an executive
compensation package are: base salary, bonus based on accounting performance
and compensation tied to the form’s stock price.
Financial managers are concern with three fundamental decisions when running a
Business. The first one is the Capital budgeting decisions which identifies the
productive assets the firm should buy. Secondly the Financial decisions which
determine how the firm should finance and pay for assets and the last one Working
Capital Management decision that works to determine how day to day financial
matters should be managed so that the firm can pay its bills and how surplus cash
should be invested.
Double...
Felix Tapia
University of Phoenix
Puerto Rican Business Law – LAW/531PR
Israel Camacho Alicea
June 4, 2013
Financing decisions determine how a firm will raise capital. Examples of financing
decisions include securing a bank loan or selling debt in the public capital markets.
Capital budgeting involves deciding which productive assets the firm invests in, such
as buying a new plant or investing in the renovation of an existing facility.
Financial managers should select a capital project only if the value of the projects
expected future cash flows exceeds the cost of the project. In other words, firms
should only make investments that will increase their value, and thus increase the
stockholders’ wealth. Working capital management is the day-to-day management
of a firm’s short-term assets and liabilities. Working capital can be managed by
maintaining the optimal level of inventory, managing receivables and payables,
deciding to whom the firm should extend credit, and making appropriate investments
with excess cash. The answer that does not pertain to corporations is: c. Are the
easiest type of business to form. The three main components of an executive
compensation package are: base salary, bonus based on accounting performance
and compensation tied to the form’s stock price.
Financial managers are concern with three fundamental decisions when running a
Business. The first one is the Capital budgeting decisions which identifies the
productive assets the firm should buy. Secondly the Financial decisions which
determine how the firm should finance and pay for assets and the last one Working
Capital Management decision that works to determine how day to day financial
matters should be managed so that the firm can pay its bills and how surplus cash
should be invested.
Double...