What is meant by potential investments relevant cash flows? What are sunk costs and cannibalization, and do they affect the process of determining proposed investments incremental cash flows?
Answer to relevant QuestionsA real estate development firm owns a fully leased forty-story office building. A tenant recently moved its offices out of two stories of the building, leaving the space temporarily vacant. If the real estate firm considers ...Why must manager intuition be part of the investment- decision process regardless of a project NPV or IRR? Why is it helpful to think about real options when making an investment decision? Why might the discount rate vary as you move through a decision tree? What are the relative advantages and disadvantages of private placements, compared to those of public offerings of stock and bond issues? What are the principal benefits of going public? What are the key drawbacks?
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