1. Concepts used in cash flow estimation and risk analysis You can come across different situations in your life where the concepts from capital budgeting will help you in evaluating the situstion and making calculaced decisions. Consider the following situation: The following table contains five definitions or concepts. Tdentify the term that best corresponds to the concept or definition given A successful sushl chain in Hong Kong spent $00,000 to conduct a study on whethec to open a locotion in the United Stotes. The study showed that the best place for the company to open its first locotion would be in Chicago. When conducting lts copital budgeting analyals, how should the company account for the cost of the study when estimating the amount of the initial investment that the new store will require? The company should include half of the cost of the study In the intial investment. The company should ignore the cost of the study. The company ahould include the cost of the study in the amount of the initial investment. A large soff-drink comphny currently produces regular cola and diet cola. It is considering introducing a new soft drink that tastes Ilke reguiar colo but. has zero calories like the diet cola. The new zero-calorie drink that tastes like regular cola is most likely to produce externality, 1. Concepts used in cash flow estimation and risk analysis You can come across different situations in your life where the concepts from capital budgeting will help you in evaluating the situstion and making calculaced decisions. Consider the following situation: The following table contains five definitions or concepts. Tdentify the term that best corresponds to the concept or definition given A successful sushl chain in Hong Kong spent $00,000 to conduct a study on whethec to open a locotion in the United Stotes. The study showed that the best place for the company to open its first locotion would be in Chicago. When conducting lts copital budgeting analyals, how should the company account for the cost of the study when estimating the amount of the initial investment that the new store will require? The company should include half of the cost of the study In the intial investment. The company should ignore the cost of the study. The company ahould include the cost of the study in the amount of the initial investment. A large soff-drink comphny currently produces regular cola and diet cola. It is considering introducing a new soft drink that tastes Ilke reguiar colo but. has zero calories like the diet cola. The new zero-calorie drink that tastes like regular cola is most likely to produce externality
