Discuss on Short Term Vs. Long Term FinancialDecisions Capitalinvestme

QUESTION

Discuss on Short Term Vs. Long Term FinancialDecisions
Capitalinvestment decisions or techniques are long-term financialdecisions about which projects receive investment, whether tofinance that investment with equity or debt, and when or whether topay dividends to shareholders. Capital investment decisions are long-term corporate finance decisions relating to fixed assets and capitalstructure. Corporate management seeks to maximize the value of thefirm by investing in projects which yield a positive net presentvalue when valued using an appropriate discount rate. CapitalInvestment Decisions comprises an Investment decision, a financingdecision and a dividend decision. Onthe other hand, the short term decisions are come under the WorkingCapital Management. This Working Capital Management deals with theshort-term balance of current assets and

t liabilities,it means managing cash, inventories and short-term borrowing andlending etc. Decisions relating to Working Capital and Shortterm financing are referred to as Working CapitalManagement. These involve managing the relationship between afirms short-term assets and its short-term liabilities. Thegoal of working capital management is to ensure that the firm isable to continue its operations and that it has sufficient cashflow to satisfy both maturing short-term debt and upcomingoperational expenses. Hope it may helps you

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