Chapter 1

Question 1

What Type of Decision is this: deciding what the firm should invest in. What projects, assets, and long term investments will increase the value of the firm.

Answer 1

Investment Decision

Question 2

What Type of Decision is this: Considers how does a firm obtain its capital it needs to support investment decisions. Decides what mix of bonds/loans and equity (shares) the firm should use to fund Investments.

Answer 2

Financing Decision

Question 3

What Type of Decision is this: The day to day activities of a firm. Mangers the short term assets (inventory) and short term liabilities.

Answer 3

Working capital management

Question 4

The amount of debt and equity used by a firm to finance operations is called the firms…

Answer 4

Capital Structure