ENG 111 Winter 2014 HW1 ANSWERS

This is a capital structure decision d 1 point

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: ect more than one decision. a) (1 point) Hiring a fresh- out- of- college engineer as the CEO. This decision does not concern any of the choices directly. As mentioned in class, many of the important assets a company has, like human capital, is not reflected in the numbers provided in the balance sheet. b) (1 point) Investing the extra cash on a piece of land that is estimated to go up in value versus keeping it in the cash account. Land is a fixed asset and can be considered as a capital budgeting decision. Also, since it is going to be financed by cash, it will affect the Net Working Capital as well. c) (1 point) Deciding whether to borrow from a financial institution versus issuing and selling new stock shares. This is a capital structure decision. d) (1 point) Deciding whether to acquire a smaller competitor. This is a capital budgeting decision. Depending on how it is financed it can be a Capital Structure and/or Net Working Capital decision as well. 3. Assume you started a company few...
View Full Document

This note was uploaded on 01/16/2014 for the course ENGR 111 taught by Professor King during the Winter '09 term at UCLA.

Ask a homework question - tutors are online