1. What are three key inputs to the valuation model? How would you determine the valuation of an asset? What factors could complicate your calculations and give different results? How would the intrinsic value differ from the market value?
2. What are the risk associated with strict capital budgeting in an environment of scarce economic resources? What should you do to avoid these risks?
3. Some time the IRR method of project evaluation will give a different result to the NPV calculations. Why might this be the case? If this does happen what rule should an analyst follow?