Financial Management - F inancial Management Answers 3...

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Answers 3 questions 1. What long-term investments should the firm take on? a. Most important question any firm takes on b. Answer determines who you are as a firm 2. Where will we get the long-term financing to pay for the investment? a. Equity – get more owners b. Debt – take out loans c. Correct balance between these two is crucial i. General Motors went bankrupt because of too much debt 3. How will we manage the ever-day financial activities of the firm? a. Pay your workers, suppliers, expenses, etc. b. You can be perfect on question 1 & 2 and the firm will still crash if you can’t produce a pay check for your employees on Friday Financial Management Decisions What long-term investments or projects should the business take on? Capital Budgeting (90% of semester on this one) How should we pay for our assets? Should we use debt or equity? Capital Structure How do we manage the day-to-day finances of the firm? Working Capital Management
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This note was uploaded on 05/26/2011 for the course FINA 3000 taught by Professor Laplante during the Spring '08 term at University of Georgia Athens.

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Financial Management - F inancial Management Answers 3...

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