Topic 1

• Finance


  The study of how people and businesses evaluate investments and raise capital to fund these investments
• Importance of finance

  • Knowledge of financial tools is critical to making good decisions in both corporate world and personal lives
• Three primary business decisions of a finance manager

  1. Capital budgeting decisions

  2. Capital structure decisions

  3. Working capital management
• Capital budgeting decisions


  What long-term investments should the firm undertake?
• Capital budgeting decisions


  • Should we build this plant?
• Capital structure decisions


  How should the firm raise money to fund these investments?
• Working capital management


  How can the firm best manage its cash flows as they arise in its day-to-day operations?