1. In two sentences, explain why the strategic plan is important to capital budgeting
2. In two sentences, explain why capital projects are important to the firm
3. What does the net present value (NPV) of a project measure?
4. In the typical project life, where would you expect to see the most positive cash flows- the acquisition stage, the operating stage, or the disposition stage
5. Do current asset balances stay constant over the life of the project or do they change? Explain
6. If Company A increases its inventory from year 1 to year 2 would this increase be modeled as an inflow or outflow of cash?
7. In two sentences explain why it is important for a "post-audit" on a project to be done?
8. In two sentences explain the role of depreciation in estimating operating stage cash flows
9. Discuss a possible "negative externality" associated with a capital budgeting project?
10. Do projects acquire the same level of cash flow estimation or do some require more Explain.