Questions from General Finance

Q: If a project requires an additional investment in working capital, how

If a project requires an additional investment in working capital, how should this be treated when calculating the project’s cash flows?

Q: Here are data on $1,000 par value bonds issued

Here are data on $1,000 par value bonds issued by Microsoft, GE Capital, and Morgan Stanley. Assume you are thinking about buying these bonds. Answer the following questions. a. Assuming interest is p...

Q: How do sunk costs affect the determination of cash flows associated with

How do sunk costs affect the determination of cash flows associated with an investment proposal?

Q: Use the concept of real options to explain why large restaurant chains

Use the concept of real options to explain why large restaurant chains often introduce new concept restaurants that have negative NPVs.

Q: Explain how simulation works. What is the value in using a

Explain how simulation works. What is the value in using a simulation approach?

Q: In the chapter introduction we learned that AT&T (

In the chapter introduction we learned that AT&T (T) borrowed $3 billion by issuing bonds in the public bond market. Although this may sound like a lot of money, AT&T owed almost $65 billion in corpo...

Q: Why might firms whose sales levels change drastically over time choose to

Why might firms whose sales levels change drastically over time choose to use debt only sparingly in their capital structures?

Q: Many CFOs believe that the firm’s composite cost of capital is saucer

Many CFOs believe that the firm’s composite cost of capital is saucer-shaped or U-shaped. What does this mean?

Q: Explain how the financial manager might use industry norms in the design

Explain how the financial manager might use industry norms in the design of the company’s financing mix.

Q: Distinguish between business risk and financial risk. What each type of

Distinguish between business risk and financial risk. What each type of risk?