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1. What is capital budgeting? (1 point) 2. What is the difference between independent and mutually exclusive projects? (1 point) 3. What is the NPV

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1. What is capital budgeting? (1 point) 2. What is the difference between independent and mutually exclusive projects? (1 point) 3. What is the NPV for Franchise S? (1 point) 10% Franchise S 2 Time period: Cash flow: Disc. cash flow: 50 20 (100) (100) 70 NPV(S) = 4. What is the NPV for Franchise L? (1 point) Franchise L 2 Time period: Cash flow: Disc. cash flow: 10 60 80 (100) (100) NPV(L) 5. What is the rationale behind the NPV method? According to NPV, which franchise or franchises should be accepted if they are independent? Mutually exclusive? (1 point) 4. What is the NPV for Franchise L (1 point) Franchise L Time period: Cash flow: Disc. cash flow: (100) (100) 10 60 80 NPV(L) 5. What is the rationale behind the NPV method? According to NPV, which franchise or franchises should be accepted if they are independent? Mutually exclusive? (1 point)

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