Essay Questions:
1- If interest expense is a cash disbursement, why is it excluded from Operating Cash Flow?
2- Since depreciation is a non-cash expense, does it have an affect NPV and IRR? Explain.
3- What determines the value of an economic asset?
4- Why would investors demand a return on an investment that has no risk?
5- Why does the present value of a future cash flow decline as the required return increases?
6- Explain why historical information should be useless in predicting the stock market.