Complaint Management is an Investment Cost of customer acquisition vs. retention Loyalty Word of mouth (positive or negative) Information for design changes Compensation may exceed price

(Continued with question 1 in exercise for chapter 3). Suppose instead of given 2000 there is an investment function which takes the form Above, i is the interest rate. Meanwhile there is a demand function for money Md=1.2Y-20000i Assume that the monetary base is equal to 2000 while the required reserve ratio is 1 ). What is the equilibrium level of output Y and interest rate?

Accounts receivable Management Size of Investment in Accounts Receivable Percent of credit sales to Total sales Level of sales Terms of sale Quality of customer Collection Efforts

Capital Budgeting: the process of planning for purchases of long-term assets. example Our firm must decide whether to purchase a new plastic molding machine for $127,000 How do we decide? Will the machine be profitable? Will our firm earn a high rate of return on the investment?

Development Drivers Top 25 Retailers Decline in cross-border investment barriers Saturation and slow growth in local markets

Investment Decision vs. Financing Decision Market Efficiency Weak form efficiency Semi- -strong form efficiency Strong form efficiency Lessons of Market Efficiency

24.00: Problems of Philosophy Prof. Sally Haslanger October 31, 2001 Freewill: Hard Determinism 1. What is our investment in freewill? Not just a sentimental attachment: At the root of how we organize our own lives(deliberation matters). At the root of how we interact with others(presupposed by praise and blame, punishment)

Topics Covered Discounted Cash Flows. NetProfits OIncremental Cash Flows STreatment of Inflation Separation of Investment Financing Decisions SExample: Blooper Industries Irwin/McGraw-Hill

How Firms Organize Their Investment Process Some “What If” Questions Sensitivity Analysis Break Even Analysis Flexibility in Capital Budgeting Decision Trees Options

Topic 1: What is Corporate Finance?(cont 1 2 Financing Decisions In the previous section the focus was on investment decisions. It was assumed throughout that the firm was financed with equity. In this section we discuss financing decisions. As a prelude to this we will briefly discuss the notion of efficient