Final answer:
Important financial information for Frito-Lay includes potential profitability, market trends, and feasibility studies. Management's insight versus external investors' knowledge affects the choice of capital sources, and established firms with transparent financial information are more likely to attract investors.
Step-by-step explanation:
When Frito-Lay is assessing whether to proceed with a business decision, some of the most important financial pieces of information include the potential profitability of the new venture, the market trends regarding similar products, and a feasibility study of the product in different regions. Imperfect information plays a significant role in these decisions, as the management team likely has more insight into the company's future success than external investors, which influences their choice between different sources of financial capital.
As a company grows and establishes a track record of profitability and transparency, outside investors, such as bondholders and shareholders, may become more comfortable providing financial capital, given the decrease in information asymmetry about the firm's financial health. Therefore, Frito-Lay should consider the availability of reliably communicated company data on revenues, costs, and profits when evaluating the prospects of their business decision.