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Finance is one of the major functional areas of business that is concerned with all of the
monetary aspects of a business that deals with facts, principles and theories relating to raising and
using money. It is an integral part of total management and cuts across functional boundaries that
includes activities such as investing, forecasting, budgeting and others.
2. What are the three basic questions addressed by the study of finance?
The three basic questions are:
- How can the firm best manage its cash flows as they arise in its day-to-day operations?
- How should the firm raise money to fund these new investments?
- What long-term investments should the firm undertake?