1. Two techniques that are often used to financially evaluate capital projects include IRR and NPV. Describe which you believe is preferable and why. A discussion of disadvantages of either approach is required to justify your opinion.

 

2. you learned two techniques to evaluate the value of common stock. The Constant Growth Model (similar to the Dividend Discount Model) and the Corporate Valuation Model.

Discuss the main differences of each and the approach that you believe is most useful in practice and why. 

 

3. You are CFO of a small business that maintains average deposit balances at local banks of $450,000 over the course of the last several years. During the year, due to ski season sales of skis and ski equipment, deposit balances on any day may be between $1.5 million and $250,000.

Your boss heard about the collapse of Silicon Valley Bank and that other banks may be at risk of collapse, including regional banks in the Western US. He and other investors called an emergency meeting to discuss their concerns. You were asked to construct a powerpoint presentation and make recommendations as to actions to take if any. 

List three ideas that you would present to your boss and investors to manage the risks to your business.

Select the best idea and explain why it is necessary, and how it would address the risks to the business,

Answer rating: 100% (QA)

1 IRR vs NPV Both the Internal Rate of Return IRR and Net Present Value NPV are commonly used techniques for evaluating capital projects NPV calculate... View the full answer