Financial planning is necessary because financing and investment decisions interact and should not be made independently.

Question

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Financial planning involves analyzing a person or organization's current financial situation, determining financial goals and objectives, and developing a plan to achieve those goals through the use of financial strategies such as budgeting, saving, investing, and managing debt. Financing decisions, such as borrowing money or raising capital, can have a significant impact on an organization's financial situation and should be considered when developing a financial plan. Investment decisions, such as buying stocks or real estate, can also impact a person or organization's finances and should be made in the context of an overall financial plan. Therefore, financing and investment decisions should be coordinated and not made independently.

Financial Planning Is Necessary Because Financing and Investment Decisions Interact