assignment2-Hadi alaei

assignment2-Hadi alaei - Assignment 2 Hadi alaei...

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Assignment 2 Hadi alaei Fundementals of corporate finance 1. What is the purpose of long-range planning? Long-range planning involves developing a guideline for the future well-being and success of a company or an organization. This guideline makes sure that goals, objectives are established and achieved and determines the direction in which the company will be heading. Moreover, long-range planning tries to anticipate problems before they arrive so that it can create solutions and alternatives. 2. What are the major decisions areas involved in developing a plan? The firm’s needed investment in new assets The degree of financial leverage the firm choose to employ The amount of cash the this is necessary and appropriate to pay shareholders The amount of liquidity and working capital the firm needs on an ongoing basis. 3. What is the percentage of the sales approach ? A financial planning method in which accounts are varied depending on a firm’s predicted sales level. 4. How do you adjust the model when operating at less than full capacity? When operating at less than full capacity, you adjust the model by changing the level of demand for external funds and the level of spending for fixed new assets and the
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This note was uploaded on 05/31/2008 for the course BUSINESS A BUS350 taught by Professor Gilbert during the Spring '08 term at Excelsior.

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assignment2-Hadi alaei - Assignment 2 Hadi alaei...

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