Capital budgeting deals with investments in fixed

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Capital budgeting – deals with investments in fixed assets capital structure decisions – funding choices and the mix of long term sources of funds working capital management- current assets/short term financing s-corporation – provides limited liability while allowing the business owners to be taxes as if they were in a partnership limited liability company-cross between partnership and a corporation under which the owners retain limited liability but the company is run and is taxed like a corporation Chapter 3 Taxable income – has two components: operating income and capital gains Capital gain = gain from selling any asset that is not part of the ordinary operations Operating income – gross profits less any operating expenses Marginal tax rates – rates applicable to the next $ of income Direct Transfer of funds – firm seeking cash sells its securities directly to investors who are willing to purchase them in hopes of earning a large return a. Angel investor – a wealthy private investor b. Venture capitalist – investment firm Indirect transfer – using an investment banking firm Proprietorship Largest number Own person owns, holds title and is legally responsible a.
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