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Finance Type in General Electric Company for Quotes

Go to Yahoo! Finance and type in GE (General Electric Co.) for Get Quotes. Under News and Info, check on Headlines. Go to headlines for Thursday, November 26, 2009 and read the article "GE Health care installs Russia's first GE high definition CT scanner at Moscow's Center of Medical Rehabilitation."
Explain the following concepts in the context of the article.
a) Capital Budgeting
b) WACC
c) The overall objective of a financial manager.

Solution Preview

a) Capital Budgeting: The process in which a business determines whether projects such as building a new plant or investing in a long-term venture are worth pursuing. Oftentimes, a prospective project's lifetime cash inflows and outflows are assessed in order to determine whether the returns generated meet a sufficient target benchmark. Ideally, businesses should pursue all projects and opportunities that enhance shareholder value. However, because the amount of capital available at any given time for new projects is limited, management needs to use capital budgeting techniques to determine which projects will yield the most return over an applicable period of time. The parent company ...

Solution Summary

The expert explains capital budgeting, WACC and the overall objective of a financial manager for the article "GE Health care installs Russia's first GE high definition CT scanner at Moscow's Center of Medical Rehabilitation."

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