Guillermo Furniture Store Concepts
People go into business to make money by providing goods and/or services to their customers. Some businesses are successful while others fail. Managers make difficult and complex decisions that can make or break the company. The Guillermo Furniture Store in Sonora, Mexico is not any different. The owner, Guillermo Navallez, must make decisions that will, no doubt, have a huge impact on the success or failure of his company, so he will engage in foundational corporate finance principles that will guide his decision-making. This paper will explain several principles of foundational corporate finance, and show how they relate to the Guillermo Furniture Business Scenario.
Principle of Self Interested-Behavior
The principle of Self-Interested Behavior of foundational corporate finance plays a fundamental role in the Guillermo’s decision-making because he acts in his own best interest to attain the success of his company. The principle of Self-Interest Behavior states that, “All things being equal, all parties to a financial transaction will choose the course of action most financial advantageous to themselves” (Emery, 2007). Naturally, Guillermo wants his company to be a financial success, so he will base his decisions that will give him the best possible income. For instance, when Guillermo begins to realize that his profits are dropping and costs are going up, he conducts research on his competitors to understand how they are more successful than his company. His way of life has been threatened, and now he must act quickly to save his company. The fact that Guillermo does not want to merge or acquire with another company, shows that he does not want the opportunity cost of giving up family time.

Principle of Two-Sided Transactions
Two-Sided Transactions Principle is important to Guillermo’s business as he will conduct