Questions from Corporate Finance


Q: What are the five general rules for calculating FCF?

What are the five general rules for calculating FCF?

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Q: Why is it important to understand that cash flow forecasts in an

Why is it important to understand that cash flow forecasts in an NPV analysis are expected values?

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Q: When choosing between mutually exclusive projects of unequal lives, how can

When choosing between mutually exclusive projects of unequal lives, how can we ensure that the best decision is made?

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Q: Under what conditions is the WACC the appropriate discount rate for a

Under what conditions is the WACC the appropriate discount rate for a project?

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Q: Under what circumstance would you replace an old machine that is still

Under what circumstance would you replace an old machine that is still operating with a new one?

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Q: How is the proportion of fixed costs in a project’s cost structure

How is the proportion of fixed costs in a project’s cost structure related to the sensitivity of EBITDA and EBIT to changes in revenue?

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Q: How does operating leverage change when there is an increase in the

How does operating leverage change when there is an increase in the proportion of a project’s costs that are fixed?

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Q: How is a sensitivity analysis used in project analysis?

How is a sensitivity analysis used in project analysis?

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Q: What does the WACC for a firm tell us?

What does the WACC for a firm tell us?

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Q: How do taxes affect the cost of debt?

How do taxes affect the cost of debt?

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