1.Explain why we measure a project’s risk as the change in the CV.
2.Explain how using a risk-adjusted discount rate improves capital budgeting decision making compared to using a single discount rate for all projects?
3.Why do we focus on cash flows instead of profits when evaluating proposed capital budgeting projects?
4.What is a sunk cost? Is it relevant when evaluating a proposed capital budgeting project? Explain.
5.What is a sunk cost? Is it relevant when evaluating a proposed capital budgeting project? Explain.