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:,113,Which of the following questions are addressed by financial managers? I. How should a product be marketed? II. Should customers be given 30 or 45 days to pay for their credit purchases? III. Should the firm borrow more money? IV. Should the firm acquire new equipment?,Financial Management Decisions,Capital budgeting What longterm investments or projects should the business take on? Capital structure How should we pay for our assets? Should we use debt or equity? Working capital management How do we manage the daytoday finances of the firm?,Forms of Business Organization,Three major forms in the United States Sole Proprietorship Partnership General Limited Corporation Limited Liability Company,Sole Proprietorship,Advantages Easiest to start Least regulated Single owner keeps all the profits Taxed once as personal income,Disadvantages Limited to life of owner Equity capital limited to owner’s personal wealth Unlimited liability Difficult to sell ownership interest,Partnership,Advantages Two or more owners More capital available Relatively easy to start Income taxed once as personal income,Disadvantages Unlimited liability General partnership Limited partnership Partnership dissolves when one partner dies or wishes to sell Difficult to transfer ownership,Corporation,Advantages Limited liability Unlimited life Separation of ownership and management Transfer of ownership is easy Easier to raise capital,Disadvantages Double taxation (income taxed at the corporate rate and then dividends taxed at the personal rate),I.