Question One

Please answer all 7 questions. And label 1,2,3,4,5,6,7.

Answer options for the table are as follows.

One: Corproate risk, stand alone risk, beta risk, marekt risk

Two: Coroprate risk, Beta Risk, Cannibalization, Exchange Rate Risk

Three: Relevent Cash Flow, Incremental Cash Flow, Terminal Cash Flow, Initial Cash Flow

Four: Possibility Analysis, Sensitivity Analysis Casino Analysis, Pure-play analysis

Five: Externalities, Real Option, Opportunity Cost, Expropriation

Six: Multiple choice answer given in screenshot

Seven: An environmental, a negative within firm, a positive within firm

The following table contains five definitions or concepts. Identify the term that best corresponds to the concept or definition given. Concept or Definition Term The risk of a project without factoring in the impact of diversification An example of externality that can have a negative effect on a firm The cash flow at the end of the life of the project A risk analysis technique that measures changes in the internal rate of return (IRR) and net present value (NPV) as individual variables are changed Creates value for a company because it gives the company the right but not the obligation to take future action to increase its cash flows Newcastle Coal Co. owns a warehouse that it is not currently using. It could sell the warehouse for $300,000 or use the warehouse in a new project. Should Newcastle Coal Co. include the value of the warehouse as part of the in tia investment in the new project? O Yes, because the firm could sell the warehouse if it didn't use it for the new project. O No, because the cost of the warehouse is a sunk cost. O No, because the company will still be able to sell the warehouse once the project is complete. A large soft-drink company currently produces regular cola and diet cola. It is considering introducing a new soft drink that tastes like regular cola but has zero calories like the diet cola. The new zero-calorie drink that tastes like regular cola is most likely to produce externality