Management and Organizational Studies 1021 Study Guide - Final Guide: Net Present Value, Discount Window, Cash Flow

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 1021
• Professor: Chris Racknor

Document Summary

The role of finance in business: three basic issues addressed by the study of finance, what long-term investments should the firm undertake? (capital budgeting decision, equipment, land, product line, big ticket items. In a bigger corporation, you will have different departments doing these things, in a smaller one there may only be one person. Function of financial manager: a) financial markets (investors) to financial manager, raising funds, financial manager to financial markets (investors, obligations (stocks, debt securities, financial manager to operations (plant, equipment, projects) ), investors mistrust the market, business can"t grow/must layoff people. Things are recorded when they are incurred not when they are paid. Since we can earn interest on money received toady, it is better to receive money sooner rather than later: an investment can be viewed in two ways. You make the investment today, each year you are going to get return.