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Corporate Finance : Corporate Finance covers all decisions made by a firm. In fact all marketing, strategic and advertising are all corporate finance decisions Financial Management decisions. Corporations need an almost endless variety of real assets .many of these assets are tangible such as machinery, factories and offices .To obtain money the corporation sells claims on its real assets and on the cash those assets will generate . These claims are called financial assets or securities The financial manager stands between the firm’s operations and the financial ( or capital) markets, where investors hold the financial assets issued by the firm . Flow of cash between financial markets and the firm’s operations .Key 1) Cash raised by selling financial assets to investors 2) Cash Invested in firm’s operations and used to purchase real assets 3) Cash generated by the firm’s operations 4) a cash reinvested 4 b) cash returned to investors. The diagram takes us to the financial managers two basic questions . 1)First what real assets should the firm invest in ? ' the Firm’s investment or capital budgeting The financial markets in which the firm raises money are likewise international. The stockholders of large corporations are scattered around the globe .Shares are traded around the clock in New York, London, Tokyo and other financial centres. Investment Principle : Firms should invest in assets only when they are expected to earn a return greater than a minimum acceptable return-hurdle rate Note that investments are designed to generate revenues and profits Some investments whose benefits show up as not highe ...