GEN BUS 310 Lecture 4: Module 4: Law- Legal Entities, Goals of the Firm, and the Business Process
11 Feb 2017
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Module 4: law- legal entities, goals of the firm, and the business process. Capital budgeting- the process of planning and managing a firm"s long-term investments. Important to identify opportunities in which the value of the cash flow generated by an asset exceeds the cost of that asset. Essential to evaluate size, timing, and risk of future cash flow. Capital structure/financial structure- the specific mixture of long-term debt and equity the firm uses to finance its operations. Two area of concerns in this matter: Working capital- a firm"s short terms short-term capital, such as inventory, and its short-term liabilities, such as money owed to the suppliers and workers. Managing working capital ensures that the firm has sufficient resources to continue its operations and avoid costly interruptions. There are three majors legal forms of business organizations. As a firm grows, the advantages of the corporate form may come to outweigh the disadvantages. Sole proprietorship- a business owned by one person.
