ECON 371- Midterm Exam Guide - Comprehensive Notes for the exam ( 25 pages long!)
11 Oct 2017
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Chapter 1: the firm and the financial manager. Sole proprietorship: the primary form of business that is easy to form and dissolve. Partnership (general and limited: are dominant forms for specialized businesses like medical clinics and law firms, general liability: if you fall then the owner is liable, limited liability: if you fall then the business is liable. A legal entity that allows the owners to be free of liabilities. Although the separation of ownership and control adds flexibility to the operation, it also creates the. Shareholders are owners, but the corporations are run by employees led by the ceo agency problems. Corporations are the dominant form of business in the modern day. More than 88% of business transactions in canada are done by corporations. What capital investment projects to invest in (capital budgeting decision) How to pay for those assets (financing decision) The financial manager needs to place a value on the future benefits from the investment projects.
