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1.Which factors should be included when estimating cash flows?

2.Calculate the Modified Internal Rate of Return (IRR).

3.Definition and examples of incremental cash flows.

4.Calculate the NPV of two different project using the Equivalent Annual Annuity (EAA) found in my notes.

5.Components of the Weighted Average Cost of Capital (WACC) (cost of debt, preferred stock, etc).Rank from cheapest to most expensive.

6.Does Retained Earnings have a cost and should this be included in the estimation of the WACC?

7.Calculate the cost of retained earnings.

8.Should the same discount rate (WACC) be used for all projects?

9.Can land be considered an incremental cash flow?

10.What happens when the internal rate of return (IRR) is greater than the cost of the project?

11.What is the relationship between Net Present Value (NPV) and IRR?

12.Determine the NPV of two different projects when using replacement chain analysis.

13.Determine whether a project should be accepted or rejected based on IRR or NPV.

14.Calculate a projects payback period.

15.When calculating WACC, do we use the before or the after cost of debt?

16.When calculating WACC, do we use long-term debt, short-term debt or a combination of both?

17.What discount rate do we use when calculating NPV?What discount rate do we use when calculating IRR?Is it the same?

18.Calculate the NPV of an investment.

19.What happens to WACC when there is a break or jump in the MCC schedule?

20.Examples of cash flows that do not result from the decision to accept a project.

21.Activities that are not a major use of the cost of capital.

22.Which capital budget method does not include salvage value?

23.Which cost of capital factors can a firm not control?

24.Name, define and explain different methods for analyzing risk in capital budgeting.

25.Calculate WACC.Similar to problem provided in additional homework problem.

26.Calculate the relevant cash flows and then the NPV of the project.Similar to problem in lecture notes and additional homework problem.