Depending on the Nature of a firm, there are around five to ten major financial functions that have to be managed in harmony to carry out the company’s corporate finance functions. Companies that are hiring for future leadership positions in corporate finance will often have new employees work in jobs that are ‘rotational’ in nature for about two to three years. The idea is that these future leaders will need to gain exposure to several different financial functions in order to work closely with or to actually become the Chief Financial executives who have to deal with a complete system of ideas. There are two main sub functions of Corporate Finance. These are: The Capital investment Function and The Financing Function. investasi emas
The Capital Investment Function relates to building the firm’s investment strategy and portfolio and the selection of investment projects. In this department the CFO works closely with strategic managers and chief executives and reveals how financial principles can help a fir make the major decisions involve in corporate strategic policy. The capital investment function can range from small investments such as individual projects such as pursuing a new market or product, all the way up to acquisition of an entire company and its product line. Whether it is a small or a large investment the company is trying to make, their strategy will depend heavily on cash flows and expected cash flows. They will be paying a lot of attention to the Net Present Value of their investment proposition as el as the Internal Rate of Return that the investment is going to give them. Firm’s will continue to be successful in their investment decisions as long as they pursue projects where their internal rate of return is more than the market rate of return and the Net Present Value of the investment is greater than zero.