What is the difference between an investment decision and a financing decision? Explain. | Homework.Study.com (2024)

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• What are some factors to be considered in making capital investment decisions?
• Identify two important variables to be considered when making an investment decision.
• A) Compare and differentiate between the financial and investment decisions
• 1. How can a company finance a significant capital investment project? 2. Why would a company choose one financing option over another?
• How can a company finance a significant capital investment project? Why would a company choose one financing option over another? Explain your answer.
• What is the difference between equity financing and debt financing?
• What are the relative advantages of equity financing versus debt financing?
• Define and discuss the differences between operating, investing and financing activities.
• What are the differences between debt and equity investments?
• Define the term "cost of capital." How would cost of capital be used in an investment decision?
• What is the difference between debt and equity financing?
• What is the difference between solvency, capital, and investment management?
• What advantages does financing with bonds provide over equity?
• Discuss the advantages and disadvantages of equity financing.
• What factors should management consider, in determing if borrowing funds is a visable solution? With that said, in acquiring funds to finance major projects, explain how should management choose among the alternatives.
• What is a capital investment? How does it differ from an investment in stocks or bonds?
• What would influence a company to choose equity or debt as an investment?
• Describe the importance of capital budgeting and the analysis of decisions.
• What are some of the issues that affect equity investments? In particular, explain how investor control is a concept relating to the accounting for investments.
• Explain how to determine additional investment in a financial statement.
• Explain the difference between a finance lease and an operating lease as a means of financing the purchase of an asset.
• What rule should a firm follow when making financing decisions? How can the managers of the firms create valuable financing opportunities?
• Identify the advantages and disadvantages of bond financing.
• What are the advantages and disadvantages of IT investment?
• What to consider when deciding whether to invest in a company?
• Discuss and explain capital budgeting or investment analysis.
• What are the main differences between Finance and Accounts?
• What is the decision rule for net present value investments?
• What are the fiduciary funds? Identify and explain the two main types and what is the main difference between the funds?
• What are the advantages of financing through the sale of stock?
• What are fiduciary funds? Identify and explain the two main types and their differences.
• Discuss the advantages and disadvantages of the following type of financing: Equity financing.
• Why do companies make investments in other companies? What are the differences between debt and equity investments? What would influence a company to choose equity or debt as an investment?
• What is the typical stock investment when investing cash for strategic reasons?
• What are the differences between debt and equity securities? Explain.
• Describe how capital-budgeting decision criteria would be different in a capital-rationing situation than in a situation in which capital rationing was not necessary, and explain the reasons for the difference in criteria. Describe the discounted-cash fl
• What are some examples of how financial ratios are used in the decision making process?
• What is the difference between valuation and owner equity?
• What information do stock investors need to make their investment decisions?
• Briefly explain the meaning of decision-usefulness in the context of financial reporting.
• Describe capital-budgeting decisions and how the projects are evaluated.
• What is a main risk factor when passive investors make a decision?
• What are some factors that affect capital structure decisions made by management?
• Explain the difference between return on investment and return on equity.
• Define what is the difference between Finance and Accounting.
• What are the major differences in accounting for operating and financing leases?
• Discuss the concept of bond investment and explain the advantages and disadvantages of investing in bonds.
• Which of the following is a decision made by an internal user? a. Should I invest in the business? b. Should we lend money to the business? c. How much money should the business budget for production? d. All of these are correct.
• What disadvantages does financing with bonds have vs. equity?
• Explain how the investment account is affected by investee activities under the equity method.
• Define and describe in detail what the differences are between the stated interest rate and the market interest rate.
• Describe how investing in stocks affects financial planning, liquidity management, financing, and wealth protection.
• Why is asset allocation a very important topic when you have investments? Explain.
• What are the advantages and disadvantages of both debt and equity financing?
• What is the difference between an asset, a liability, and equity?
• How does the use of the equity method affect the investor's financial statements, specifically in an investment account?
• Explain the concept of capital budgeting and detail the capital budgeting techniques used to make decisions.
• Explain how to identify whether each investment should be classified as a short-term or long-term investment.
• Explain the internal rate of return process when making a decision about a purchase or project.
• Explain how capitalization of interest costs differs for enterprise funds as opposed to governmental funds.
• What are the principal advantages often cited as motivation for a private equity buyout?
• What is the differences between return on investment and return on equity?
• Explain the advantages for a corporation to obtain financing by issuing debt over equity.
• Discuss the advantages and disadvantages of financing through borrowing from the bank.
• What are the main differences between capital and operational lease?
• Identify the five stages of the capital budgeting process. How does each stage relate to the decision-making process of a specific investment? Provide an example by pretending your company is thinking of purchasing a large asset (like a building, or piece
• Would the management make the investment? Explain.
• There are three major elements of no-equity funding. List the three types of non-equity funding and briefly describe the advantages and disadvantages of each.
• What is the difference between return on investment and return on equity?
• What are the advantages and disadvantages of investing in preferred stock?
• What is the difference between how to account for a capital lease and an operating lease?
• Discuss and differentiate the main categories of a SOCF (Operations, Investment, and Financing.)
• Discuss the advantages and disadvantages of financing through issuing bonds.
• What is the advantage of issuing bonds instead of obtaining financing from the company's owners?
• NNOs distinguish between restricted and unrestricted funds. Why is this distinction important?
• What has to happen to have positive cash flow from investments and from financing activities? Explain.
• What is the distinction, as drawn by the GASB, between a fiduciary fund and a permanent fund?
• Discuss how to analyze capital budgeting decisions. Which measures are important? Why?
• What is a depreciation tax shield, and how does it affect capital budgeting decisions?
• Explain how the statement of cash flows helps investors and creditors evaluate management decisions.
• Explain the difference in accounting methods used for passive investments, investments in which the investor can exert significant influence, and investments in which the investor has control over another entity.
• Describe how the various levels of ownership impact how companies account for investments.
• What are the advantages of issuing bonds instead of obtaining financing from the company's owners? Are there any disadvantages? Provide examples.
• Explain the factors that influence the value of a financial asset.
• State and explain the factors that affect investors.
• How do capital investments affect profitability?
• What is the best capital investment technique? Why?
• Why is cost analysis important? How can it be determined whether investments are profitable?
• What is the difference between the terms non-capital losses and capital losses?
• List, Outline and Explain the factors that contribute to choices and/or bias in Financial Report decisions.
• Explain the difference between a capital lease and an operating lease.
• Which methods of evaluating a capital investment project consider the time value of money?
• Identify four reasons that capital budgeting decisions by managers are risky.
• Explain the pros and cons of debt financing (borrowing) and equity financing (issuing stock). In today's economic climate which method makes more sense?
• Suppose you have some extra money that you would like to invest. What financial statement(s) would you use to help you make your choice?
• Explain how leaders of business use financial statements to influence their decision-making process.
• What is the difference between a trust fund and an agency fund?
• What is the importance of the statement of cash flow? Discuss the decisions that are made based upon this information
• Compare and contrast (describe and explain the relative advantages and disadvantages) of an overdraft versus a term loan versus project finance versus a syndicated loan versus hire purchase versus leasing.
• Explain the concept of cash used to purchase investments as you would describe it to the owner of a small business.