#1 on page 17 of the textbook
This is report of team number 6. These are our team members:
1. LY NAM HUNG
2. NGUYEN THI HONG LIEN
3. LE MANH HUNG
4. MAI THI TUYET ANH
The three types of financial management decisions:
ï· Capital budgeting: is defined as making a plan and managing investments of
the firm in long term.
Example of a business transaction that would be relevant to this decision:
The ABC bakery company established in Vietnam for many years and now,
ABC bakery company decides to expand their market to South East Asian
countries.
ï· Capital structure: this decision is used to finance the firm operation by
specific mixture of long-term debt and equity.
Example of a business transaction that would be relevant to this decision:
The financial manager of ABC bakery company mentioned above decided to
raise more $150,000 in South East Asian countries expansion, in which
$50,000 borrowed from the bank and $100,000 from creditors.
Debt
Creditors
$50,000
$ 100,000
ï· Working capital management: concern in short term assets to ensure
sufficient resources for the firm uninterrupted operation.
Example of a business transaction that would be relevant to this decision:
To make more products in expansion planning, financial manager decided
that material will be purchase on credit instead of borrowing in short term
form the bank.
#2 on page 17 of the textbook
The four primary disadvantages of sole proprietorship and partnership:
1- The liability of the owner for business debt is unlimited
2- Business income is considered as personal income
3- Life of proprietorship or partnership depends on owner life. The owner
use their own wealth to raise money as firm equity.
4- It is difficult to transfer ownership to other.
There are benefits to these types of business organization as...