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Final Test Paper Class BUSI 2093 Set A Q1 A. (20 Marks) Do you understand the following distinctions? Briefly explain in each
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Answer #1

Ans A

together as tangible assets, real assets are a separate and distinct asset class from financial assets.

Unlike real assets, which have intrinsic value, financial assets derive their value from a contractual claim on an underlying asset that may be real or intangible.

Ans B

Investment decisions revolve around how to best allocate capital to maximize their value.

Financing decisions revolve around how to pay for investments and expenses. Companies can use existing capital, borrow, or sell equity.

Ans C

capital decisions, determining the best projects to invest in to ensure growth and future profitability. Capital budgeting is how businesses make such decisions.

Capital structure tells you where the money for capital projects comes from.

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