Final answer:
Financial management decisions involve maximizing firm value and making choices on raising capital and acquiring assets.
Step-by-step explanation:
Financial management decisions include:
- How to operate the firm to maximize its value
- How to raise capital
- What types of assets to acquire
Firms often make decisions that involve spending money in the present and expecting to earn profits in the future. They can raise the financial capital they need through early-stage investors, reinvesting profits, borrowing from banks or issuing bonds, and selling stock. Business owners have to consider these financial capital sources and how to pay for them. By making these decisions, firms aim to maximize their value and make wise investment choices that align with their goals and risk appetite.