Options for #1 Term - real option, expropriation, externalities, opportunity cost

#2 Term -initial cash flow, incremental cash flow, relevant cash flow, terminal cash flow

#3 Term - corporate risk, beta risk, exchange rate risk, cannibalization

1. Concepts used in cash flow estimation and risk analysis Aa Aa You can come across different situations in your life where the concepts from capital budgeting will help you in evaluating the situation and making calculated decisions. Consider the following situation: The following table contains five definitions or concepts. Identify the term that best corresponds to the concept or definition given. Concept or Definition Term Creates value for a company because it gives the company the right but | not the obligation to take future action to increase its cash flows The cash flow at the end of the life of the project An example of externality that can have a negative effect on a firm [ The risk of a project without factoring in the impact of diversification[ A risk analysis technique that measures changes in the internal rate of | return (IRR) and net present value (NPV) as individual variables are changed