A. Corporate finance is important to all managers because they must generate enough cash to compensate the investors who provide necessary capital to help company by evaluating any proposal, whether it relates to marketing, production, strategy, or any other area, and implement only products that will add value to company investors.

B. The organizational forms of a company is proprietorship, partnership, and corporation:

Proprietorship is an unincorporated business owned by one individual. The three advantages are easily and inexpensively form, subject to few government regulations, and income is not subject to corporate taxation but taxed as part of the proprietor’s personal income. The three disadvantages are difficult for a proprietorship to obtain capital for growth, proprietor has unlimited personal liability for business’s debts, which can result in losses that may exceed money invested in company, and life of proprietorship is limited to life of its founder.

Partnership two or more persons or entities associate to conduct a non-corporate business for profit. It may operate under different degrees of formality, ranging from informal, oral understandings to formal agreements filed with the secretary of state in which the partnership formed. The disadvantages of partnership is the liability were partners can potentially lose all of their personal assets, even assets not invested in the business due to partnership law stating that each partner is liable for the business’s debts. The advantage is for partners to establish limited partnership were certain partners are designated general partners and others limited partners. It will allow limited partners to lose only the amount of their investment in the partnership, while the general partners have unlimited liability, but have no control in business decision like a silent partner. In addition, limited