Question: You are the DEAL! You are interviewing for a position as a CFO for a prominent firm in town. To prepare for your final interview, the hiring committee has sent you a list of questions to review and consider. To make sure that you have carefully considered their questions, write a short essay of 1-3 paragraphs addressing their questions which are listed below. Be sure that each paragraph contains at least three sentences!
1) If hired, you will have to decide on hundreds of potential projects every year. Would you use sensitivity analysis and scenario analysis or would the amount of arithmetic required take too much time and thus not be cost-effective? How much would you involve non-financial people such as those in marketing, accounting and production in your analysis?
2) Would you ever (and if so how would you) alter projects after you have accepted them and how can these alterations change a project's cash flows and thus its realized NPV?
3) Describe the post-audit process that you would implement and its relevance in your capital budgeting decisions.