The flashcards below were created by user
Risette
on FreezingBlue Flashcards.
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Chief Financial Officer (CFO)
top financial manager in a firm
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treasurer
overseas cash expenditures, credit management, capital expenditures, and financial planning
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controller
overseas taxes, cost accounting, financial accounting, and data processing
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Capital budgeting decision
What long-term investments or projects should the business take on?
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Capital structure decisions
How should we pay for our assets? Should we use debt or equity?
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Working capital management decision
How do we manage the day-to-day finances of the firm?
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Proprietorship
- single taxation
- simple, cheap
- live with owner (limited life, transferability)
- Unlimited liability
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Partnership
- Single taxation
- Fairly cheap
- Live with owners
- Some may have separation (LPs), limited liability
- Unlimited liability for GPs
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Advantages of corporations
- Limited liability
- Unlimited life
- transfer of ownership is easy (NYSE)
- Separation of ownership and management
- Easier to raise capital
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Disadvantages of corporations
- More costly to set up
- Separation of ownership and management
- Double taxation (income taxed at the corporate rate and then dividends taxed at personal rate)
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