1) The major types of decisions a financial manger has to make are Investment decision: It involves selection of appropriate mode of investment. Ex: Decision as to invest surplus in current investments or fixed assets. Financing decision: It involves selection of appropriate source of finance. Ex: Decision as to whether to go for equity or debt for expansion of operations. Dividend decision: It deals with the distribution of surplus funds generated. Ex: Whether to distribute dividend or not, if yes what percentage of dividends are to be paid. 2) Type of business organization Advantages Disadvantages Sole Proprietorship Partnership Firm Corporation Type of business organization Advantages Disadvantages Sole ProprietorshipIt is least expensive form of business to establishThe whole management and operations lies in the control of one or few individuals.Profits are completely enjoyed by owners.Few regulations and least monitoring by Government.Raising any capital is very difficult, only means are personal sources.The owner is completely responsible for all the actions. Partnership FirmEasy to establish, when compared to CorporationRaising capital is comparably easyProfits are almost completely enjoyed by partners.Partners are jointly responsible for all the actions CorporationRaising capital is easy either by debt or through equityThe liability is restricted to the value of stocks held by the individual shareholder or ownerMore regulationsHigh accountability i.e. closely monitored by governmental agenciesIt is expensive form of business to establish Solution 1) The major types of decisions a financial manger has to make are Investment decision: It involves selection of appropriate mode of investment. Ex: Decision as to invest surplus in current investments or fixed assets. Financing decision: It involves selection of appropriate source of finance. Ex: Decision as to whether to go for equity or debt for expansion of operations. Dividend decision: It deals with the distribution of surplus funds generated. Ex: Whether to distribute dividend or not, if yes what percentage of dividends are to be paid. 2) Type of business organization Advantages Disadvantages Sole Proprietorship Partnership Firm Corporation Type of business organization Advantages Disadvantages Sole ProprietorshipIt is least expensive form of business to establishThe whole management and operations lies in the control of one or few individuals.Profits are completely enjoyed by owners.Few regulations and least monitoring by Government.Raising any capital is very difficult, only means are personal sources.The owner is completely responsible for all the actions. Partnership FirmEasy to establish, when compared to CorporationRaising capital is comparably easyProfits are almost completely enjoyed by partners.Partners are jointly responsible for all the actions CorporationRaising capital is easy either by debt or through equityThe liability is restricted to the value of stocks held by the i.

1. 1)
The major types of decisions a financial manger has to make are
Investment decision: It involves selection of appropriate mode of investment.
Ex: Decision as to invest surplus in current investments or fixed assets.
Financing decision: It involves selection of appropriate source of finance.
Ex: Decision as to whether to go for equity or debt for expansion of operations.
Dividend decision: It deals with the distribution of surplus funds generated.
Ex: Whether to distribute dividend or not, if yes what percentage of dividends are to be paid.
2)
Type of business organization
Advantages
Disadvantages
Sole Proprietorship
Partnership Firm
Corporation
Type of business organization
Advantages
Disadvantages
Sole ProprietorshipIt is least expensive form of business to establishThe whole management and
operations lies in the control of one or few individuals.Profits are completely enjoyed by
owners.Few regulations and least monitoring by Government.Raising any capital is very
difficult, only means are personal sources.The owner is completely responsible for all the
actions.
Partnership FirmEasy to establish, when compared to CorporationRaising capital is comparably
easyProfits are almost completely enjoyed by partners.Partners are jointly responsible for all the
actions
CorporationRaising capital is easy either by debt or through equityThe liability is restricted to the
value of stocks held by the individual shareholder or ownerMore regulationsHigh accountability
i.e. closely monitored by governmental agenciesIt is expensive form of business to establish
Solution
1)
The major types of decisions a financial manger has to make are
Investment decision: It involves selection of appropriate mode of investment.

2. Ex: Decision as to invest surplus in current investments or fixed assets.
Financing decision: It involves selection of appropriate source of finance.
Ex: Decision as to whether to go for equity or debt for expansion of operations.
Dividend decision: It deals with the distribution of surplus funds generated.
Ex: Whether to distribute dividend or not, if yes what percentage of dividends are to be paid.
2)
Type of business organization
Advantages
Disadvantages
Sole Proprietorship
Partnership Firm
Corporation
Type of business organization
Advantages
Disadvantages
Sole ProprietorshipIt is least expensive form of business to establishThe whole management and
operations lies in the control of one or few individuals.Profits are completely enjoyed by
owners.Few regulations and least monitoring by Government.Raising any capital is very
difficult, only means are personal sources.The owner is completely responsible for all the
actions.
Partnership FirmEasy to establish, when compared to CorporationRaising capital is comparably
easyProfits are almost completely enjoyed by partners.Partners are jointly responsible for all the
actions
CorporationRaising capital is easy either by debt or through equityThe liability is restricted to the
value of stocks held by the individual shareholder or ownerMore regulationsHigh accountability
i.e. closely monitored by governmental agenciesIt is expensive form of business to establish