2007 October • economics24.com

October 31, 2007

Corporate Finance

Filed under: Finance — Tags: Capital Management, Capital Structure, Corporate Finance, Current Liabilities, Dilution, Finance Deals, Finance Options, Inventories, Investment Banker, Investment Banking, Maximum Returns, Optimal Mix, Principle Aim, Proper Finance, Proper Investment Decisions, Proper Structure, Sources Of Finance, Term Basis, Term Decision, Term Decisions — admin @ 10:35 pm

Thomas Husnik asked:

Copyright (c) 2007 Thomas Husnik

The field of corporate finance deals with the decisions of finance taken by corporations along with the analysis and the tools required for taking such decisions. The principle aim of corporate finance is enhancing the corporate value and at the same time reducing the financial risks of the company. In addition to this, corporate finance also deals in getting the maximum returns on the invested capital of the company. The major concepts of corporate finance are applied to the problems of finance encountered by all type of firms.

The discipline of corporate finance can be split into the short term and the long term techniques of decisions. The investments of capital are the long term decisions relating to the projects and the methods required to finance them. On the other hand, the capital management for working is considered as a short term decision that deals with the short term current liabilities and asset balance. The main focus here rests on the management of inventories, cash and, the lending and borrowing on a short term basis.

Corporate finance is also associated with the field of investment banking. Here, the role of the investment banker is the evaluation of the various projects coming to the bank and making proper investment decisions regarding them.

The Capital Structure:

A proper finance structure is required for achieving the set goals of corporate finance. The management has to therefore design a proper structure that has an optimal mix of the different finance options that are available.

Generally, the sources of finance will comprise of a mix of equity as well as debt. If a project is financed through debt, it results in causing a liability to the concerned company. Hence in such cases, the flow of cash has various implications regardless of the success of the project. The financing done by equity carries a lower risk regarding the commitments of the flow of cash, but the result of this is the dilution of the earnings and the ownership. The cost involved in equity finance is also higher in the case of debt finance. Hence, it is understood that the finance done through equity, offsets the reduction in the risk of cash flow. The management has to hence have a mix of both the options.

The Decisions of Capital Investments:

The decisions of capital investments are the long term decisions of corporate finance that are related to the capital structure and the fixed assets. These decisions are based of several criteria that are inter-related. The management of corporate finance attempts to maximize the firm’s value by making investments in the projects that have a positive yield. The finance options for such projects have to be done in a proper manner.

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October 29, 2007

Evaluate the following statement: Railroads, more than any other industry, transformed American economy and so

Filed under: History — Tags: American Economy, Civil War, Economy And Society, Four Decades, Railroads — admin @ 10:22 pm

KALLENBACH 80 asked:

Evaluate the following statement: Railroads, more than any other industry, transformed American economy and society in the four decades after the Civil War.

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How to buy stocks at the stock market? What are the requirements? What is the process?

Filed under: Investing — Tags: Buy Stock, How To Buy Stocks, Invest Stock, Stock Market — admin @ 1:14 pm

aeg22 asked:

I want to invest on the stock market but i don’t know how it works and what is needed. I want to know the process. thanks.

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October 27, 2007

Commercial Mortgage and Business Finance – Real Estate Investing

Stephen Bush asked:

A complicated business finance process can occur when an investor previously familiar only with residential real estate begins investing in commercial real estate investment property and business opportunity situations. Before a borrower attempts to buy a business, it is important to develop a business loan and commercial mortgage strategy.

There are many key differences between financing for commercial property investing and residential real estate investments. Because more residential property investors are exploring commercial real estate and business finance opportunities, this business opportunity financing and business loan report is designed to help educate new commercial investors about key commercial mortgage and commercial loan issues.

Rather than specifically focusing on issues that differentiate business financing from residential financing (which we have thoroughly analyzed in separate reports), this report will offer a few key observations regarding business finance elements that are often overlooked in new business investment considerations. These factors include credit card processing, business cash advance options and working capital management.

Coordinating Credit Card Processing and Business Cash Advance Programs -

Many business investments will involve the use of credit card processing decisions. These business activities should be analyzed simultaneously with business cash advance programs for several reasons. If done properly, a business should reduce their costs and improve their cash flow.

Reducing Credit Card Processing Costs in Business Investing -

One of the biggest benefits of coordinating credit card processing with a business cash advance program is the real potential that overall costs can be reduced. Such an advantage is likely to be available in conjunction with the most progressive programs by linking a low cost credit card processor with the best merchant cash advance program. Many of the best credit card processors will not be available for businesses other than through a high-quality credit card financing arrangement.

Improve Cash Flow for Business Investments -

Credit card factoring strategies can produce a business cash advance up to several hundred thousand dollars. For most businesses, this level of financing is not routinely available via other business finance programs. The decision to choose credit card financing to secure a merchant cash advance is an increasingly practical business financing response to business lenders eliminating line of credit programs.

It is important to realize that there are certain key limitations and potential difficulties with business cash advance strategies. New business owners will occasionally eliminate using a merchant cash advance without adequately considering the overall benefits because they are confused by this business finance approach. Although credit card factoring is frequently considered to be a short-term commercial financing strategy, there are also effective longer-term variations which should not be overlooked.

Working Capital Management Strategies -

Obtaining a working capital loan is usually more effective when arranged in conjunction with buying a business. However many lenders do not adequately address this issue in the early business finance stages. Before completing a purchase offer to buy a business, all business loan issues should be discussed in order to fully understand overall commercial financing choices and limitations.

After acquiring a business, it is more likely that business or personal collateral will be a necessity in getting working capital financing. One major exception to this common collateral requirement will be the use of a business cash advance and credit card factoring as mentioned above.

Additional Key Investment Business Finance and Real Estate Mortgage Issues -

As previously noted, commercial mortgage and commercial loan requirements are very different from residential financing requirements in the United States. Additional business finance reports include a discussion of many other significant financing factors. Other reports address important subjects such as business opportunity loans, business appraisals, stated income business loan options and SBA loan programs.

Most of the additional articles will provide further detail about topics discussed in this report as well as offering business financing solutions for numerous other complex business loan situations. For example, some SBA loan processes can include working capital as part of the total initial financing. For those interested in learning more about both potential advantages and problems associated with coordinating credit card processing and business cash advance services, there are several additional resources which will facilitate a better understanding of these complex business finance issues.

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October 26, 2007

What facts do we have that counter the claim American economy is on brink of collapse?

Filed under: Current Events — Tags: American Economy, Brink Of Collapse — admin @ 10:18 pm

colbyrover asked:

Is American power declining globally? Is America weak? Is American economy breaking down? What are the causes then? Can we say that America’s power is increasing overall?

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October 25, 2007

Financing and Investing to Buy a Business Without Real Estate

Stephen Bush asked:

When obtaining a business opportunity loan, borrowers will discover that many lenders simply do not provide business loans that do not include real estate as part of the business purchase. There are several other important business financing issues to analyze prior to buying a business without commercial property.

Interest in buying business opportunity investments has improved because of serious problems with residential real estate. However, because there are so many critical differences between financing residential real estate and business financing, it is important for potential business owners to educate themselves before proceeding.

In order to buy a business, a commercial borrower is likely to need business financing. If the business includes commercial real estate, the borrower will need a commercial mortgage. If the business purchase does not involve real estate, a business borrower must use a business opportunity loan.

Unfortunately the availability of business opportunity financing is more restricted than commercial real estate financing. There are also some potential limitations and problems unique to a business opportunity loan, and commercial borrowers should make every effort to avoid these business financing difficulties.

Our goal here is to focus on several financing issues that you should anticipate when commercial real estate is not part of the business purchase. Our suggested approach to business opportunity financing is provided below.

Begin your business opportunity investment financing plans by formulating a realistic assessment of cash available for a down payment and desired maximum business purchase price. A down payment of about 25% is suggested for most business financing situations described here. Usually seller financing is permissible for a portion of the down payment, but a potential buyer generally needs to plan on investing at least 10% of the purchase price from their own funds even if the seller is providing 15% or more.

Because Small Business Administration loans are essential for this kind of financing, you should explore whether you will in fact be able to qualify for these specialized business loans. This step is both important and somewhat complicated, and the involvement of an SBA loan expert is strongly advised. Among the issues to explore are whether collateral is available for SBA financing and how important refinancing is to your overall business opportunity financing process.

It is important to consider the lease terms which are possible. As noted previously, business opportunity financing and investing does not involve the purchase of commercial real estate, so arrangements must be made for a long-term lease. A ten-year maximum loan term is likely, and a shorter financing term will probably be required if the length of the lease is for less than ten years. In other words, with a seven-year lease, the commercial loan is likely to be for seven years, and even with a fifteen-year lease, the commercial financing will probably expire in ten years.

When buying a business, inquire about the possibility of including commercial real estate. With the inclusion of commercial property, you can obtain a longer business loan and the interest rate will be lower. Because the absence of a commercial mortgage can actually be an advantage, the improved terms possible by including real estate should not be looked at in isolation.

Before any offers are made to buy a business investment, borrowers should discuss their financing options with an expert for business opportunity loans. These discussions should include issues such as potential purchase price, down payment possibilities, seller financing, buyer credit scores, tax return requirements and collateral options.

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Your Personal Finance, How to Consolidate Debt

Filed under: Debt Consolidation — Tags: Consolidating Loan, Credit Advantage, Credit Card Bills, Credit Card Companies, Credit Card Debt, Credit Cards, Credit Debt, Dread, Emergencies, Gift Certificates, How To Consolidate Debt, Incentives, Interest Rate, Money, Personal Debt, Personal Finance, Personal Finances, Phone Calls, Restaurants, Theme Parks — admin @ 5:57 am

DJ Bankey asked:

Have you ever had some one explain to you how they pay for everything on there credit cards and then pay the bill completely each month before the interest is accrued. They might even confess to doing this on several different cards to get different incentives. So many credit cards give you incentives for using them as much as possible. Who doesn’t want gift certificates to theme parks or restaurants? This is not for everyone. Most of us are just not disciplined enough to use credit cards to our advantage. Unfortunately this lesson is learned the hard way with a lot of credit card debt. Sometimes we get hit with more emergencies than we can handle so we stop paying those credit cards with the fun incentives and the ones without. This is when we really start to worry about personal finance how to consolidate debt.

Stop the Harassing Calls

If you have stopped paying your credit card bills or are over limit you will start to get phone calls from the credit card companies. It is true you do owe them money and they have every right to expect it paid back, but the calls are very distressing and can make you dread the phone ringing. So it is time to stop those calls, by getting a credit card consolidating loan.

How the Right Loan Will Help

A good credit card debt consolidating loan will improve your life by letting you pay only one bill every month and should insure that in the end you will pay less in fees and interest. Make sure that you get a loan with the best possible interest rate, which means talking to allot of credit card debt consolidators. So if you want to get your personal finances back then learn how to consolidate debt.

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October 24, 2007

Personal Finance – an Integral Part of our Lives

LizaMathers asked:

All forms of educated people, intelligent individuals from all walks of life in professional occupations are often the authors of these complaints. They have managed to come to grips with law, the working of the medical professions or indeed the law of the land but when it comes to tackling the policy documents of a mortgage protection insurance plan, they tend to be totally bewildered.

I am not surprised. For far too many years the financial service industry has smothered itself in complete jargon, essentially to bewilder the consumer and conceal poor value for money . Successive UK governments have not helped, making some areas of personal finance such as pension or tax related issues impenetrable to understand, to some of the finest brains in Britain. Indeed, on such occasion they have been instrumental in causing some of the biggest problems to impact up personal finance world. A good example is mortgages interest rates.

It is against this existing backdrop that I will undertake to write a series of articles related to personal finance. Wherever possible, I will try compare personal finance views and then seek to cut the verbiage and highlight complex financial areas in simple, good old plain English. And I don’t suspect that this will be no easy task. Indeed, I will spend many a Friday or even Saturday night burning the midnight oil and banging my head against the study wall in attempt to penetrate the deepest bowels of the current personal finance world.

This article on personal finance will not actively solve your personal finance worries – that is completely down to you. But if it helps to expand your knowledge or indeed understanding of the personal finance world, or if provides you with just one tip to go out and improve your knowledge of personal finance, these articles may indeed proved a worthy aim.

Here, on our website, you will find accurate information on all credit card, loans, insurance and investment deals you can use as an efficient Personal finance comparison. Personal finance management has never been so accessible.

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October 23, 2007

is economics or management the best major to complement a degree in government?

Filed under: Higher Education (University +) — Tags: Economics, Majors — admin @ 12:20 am

Chandu asked:

Hi guys, I am defintely going to be a double major, and one of the majors is definitely going to be government. I can’t decide, though whether to get another major in economics or management . Can anyone help me out?

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October 22, 2007

Achieving you Personal Finance Goals the Right Way

Filed under: Personal Finance — Tags: Achieving Your Goals, Aspirations, Dividends, Financial Cards, Financial Goal, Financial Goals, Financial Planner, Financial Planning, Financial Security, Financial Stability, Game Plan, How Much Money, Last Dollar, Paycheck, Personal Finance, Possibilities, Resolve, Safety Net, Scams, Sound Financial Advice — admin @ 4:59 am

LizaMathers asked:

If you want to achieve your financial goal, don’t fall for get-rich-quick scams. Instead look at the possibilities offered by sound financial planning that can help you achieve your goal. If you deem this tedious and hard to follow, this is understandable especially if you are not taking home a fat paycheck. As they say, quitters never win; in this game plan, all you need is a steeled resolve to stick to your plans to achieve your dream of financial security.

Have Goal Will Plan

Achieving your financial goals is best started with a financial plan. Your personal finance goals should be clearly spelled out. Devising a safety net for the unpredictable future, demands you lay down all your financial cards, in the hope that someday the plan will pay dividends when you most need it.

Ask yourself what you need to have a secure future and your questions will determine the way your goals will be achieved. Achieving your goals may seem highly improbable because you fail to see the numerous possibilities and options where to put your money.

Sound financial advice can bring you nearer to your aspirations. Depending on your purpose, your financial plan will be adjusted accordingly. Whether you are simply hoping to pay your insurance faithfully to the last dollar or to see your investments working, things will depend on your determine to succeed

Plan for Financial Stability

Once the plan is finalized, it is your turn to make it work. Stay focused on the plan. Financially successful people say it is a difficult task to adhere strictly to the plan but they plodded on looking forward and the financial gains waiting for them at the end.

To stay focused towards your dream of security and gains, ask yourself the following questions:

-What do you wish to achieve?

-How much money do you need to invest?

-How long will it take to realize your financial gains?

-Can you fit in the additional drain in your budget?

With a financial planner to monitor your accomplishments, you can always be on guard to do what you are supposed to do–follow the plan to the letter to achieve your financial security and eventually reap your financial gains.

Stay Determined

Want to do the plan without an expert’s help? Take paper and pen and list your financial goals Separate your short-term goals from long-term goals. Estimate the cost for each goal and how long do you need to achieve it–6 months? A year?

Divide the cost of the amount in weeks and that’s how much you are going to put into it weekly. Once you’ve determined your target date, settle for it and start saving. Whatever you have outlined in your personal finance plan, follow it.

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