![]() Capital structure questions require financial managers to work with economists, lenders, underwriters, investment bankers, and other sources of external financial information and financial capital. Capital structure is the process by which managers focus more specifically on long-term debt and increasing shareholder wealth.The finance department develops and compiles cash flow estimates with input from the marketing, operations, accounting, human resources, and economics departments to develop a portfolio of investment projects that collectively maximize the value of the firm. The capital budgeting process consists of estimating the value of potential investments by forecasting the size, timing, and risk of cash flows associated with the investments. As such, capital budgeting is thought to be one of the most important financial functions within a firm. Capital budgeting decisions add the greatest value to a firm. ![]() Capital budgeting is the process of determining which long-term or fixed assets to acquire in an effort to maximize shareholder value.In many firms, the accounting and finance functions operate in the same department in others, they are separate. The accounting department basically implements the finance department’s policies. The finance department determines credit policy, establishes minimum criteria for the extension of credit to clients, terms of lending, when to extend, and when to take advantage of short-term creditor financing. The chief financial officer (CFO) and the finance team are responsible for establishing company policy for how to manage WCM. ![]()
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