What are the primary sources of short-term funds for new business owners? What are their sources of long-term funds? Why do firms generally
1.
What are the primary sources of short-term funds for new business
owners? What are their sources of long-term funds? Why do firms
generally prefer to borrow funds to obtain long-term financing rather than
issue shares of stock? 2. Go online and check the capitalization required to
open a franchise of your choice, like Subway or McDonald’s. Does the
franchisor offer financial assistance to prospective franchisees? Evaluate
the cost of the franchise versus its business potential using the risk/return
trade-off discussed in the module. 3. Obtain a recent annual report for a
company of your choice. (Hints: The Wall Street Journal has a free annual
reports service, and virtually all major companies post their annual reports
on their websites.) Look over the firm’s financial statements and see
whether they match the information in this chapter. Read the auditor’s
opinion (usually at the end of the report) and evaluate what you think are
the most important conclusions of the auditors.
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