Economics: Today and Tomorrow © 2012Chapter 10:
Financing and Producing GoodsChapter OverviewsSection 1: Investing in the Free Enterprise System
Businesses use cost-benefit analysis to decide if the benefits of expanding the business exceed the costs. To expand, businesses need to get financing, or capital. There are four ways to get financing: using your own funds, borrowing from friends or family, borrowing from a financial institution, or issuing stock. Savers unintentionally finance business growth when they deposit funds in a savings account or certificate of deposit (CD). For those who intentionally finance business growth, the reward is interest or dividends. Section 2: Types of Financing for Business Operations
There are three types of financing: short-term, intermediate-term, and long-term. The type of financing that a company chooses depends on the level of interest rates, financial condition of the company, overall market climate, and opinions of stockholders. Section 3: The Production Process
After financing has been obtained, businesses can begin production. There are four steps in production operations: planning, purchasing, quality control, and inventory control. Since the Industrial Revolution, production has been affected by technology and dividing labor.  | 
