Businesses are facing two basic financial decisions

| March 31, 2017

Question
1. Businesses are facing two basic financial decisions: the decision of investment and the decision of financing. Explain briefly what is each one of these decisions and mention that you could engage in a corporation that hired you to deal with this dilemma?

2. We know that the natural financial goal of business is to get the maximum value, increasing the wealth of the owners or shareholders of the firm, who in turn may invest or spend that wealth at their will. It is ethical or not the search for maximum value? Why yes or why not? Present real examples to strengthen your argument

3. Discuss with technical and academic criteria, the following statement: “In short, and as common sense tells us, to create economic value we must generate more cash flow and / or reduce the opportunity costs associated with those cash flows ”

4. Du Pont system provides a useful means of ratios relate to each other and to explain the return on assets and equity of the company. Based on the above, to present his insight on the following (Use tables and / or figures to argue your contributions):

a. The fast food chains and hotels can have a return on such assets, but different ratios of rotation and profit margins.

b. The merger of the suppliers and customers generally increases the profit margin, but this is offset by the reduction in turnover ratio (total asset turnover, rotation of non-current assets, rotation of current assets, rotation of customers, rotation of stock and rotation of working capital).

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