What are the three key functions of a firm and what is each responsible for?
What will be an ideal response?
The three main functions of a firm are operations, finance, and marketing. The operations function transforms material and service inputs into product and service outputs. The finance function generates resources, capital and funds from investors and sales of the firm's goods and services in the marketplace. The marketing function is responsible for producing sales revenue of the outputs.
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With the background ideas of using the cheapest source first and the impact of asymmetric information, the Pecking Order Hypothesis predicts which of the following?
A) Firms prefer internal financing second to external financing. B) If external financing is required, firms should first seek equity financing. C) If external financing is required, firms will choose to issue the riskiest security first, starting with debt financing and using equity as a last resort. D) If external financing is required, firms will choose to issue the safest or cheapest security first, starting with debt financing and using equity as a last resort.
To determine how much you would need to save each year to reach a specific goal, you would use
A) present value of $1. B) future value of $1. C) present value of an annuity. D) future value of an annuity.