Question 1: What is a firm's fundamental, or intrinsic, value? What might cause a firm's intrinsic value to be different than its actual market value?
Question 2: What is an opportunity cost rate? How is this rate used in discounted cash flow analysis, and where is it shown on a time line? Is the opportunity rate a single number that is used in all situations?
Question 3: What is operating capital, and why is it important?
Question 4: Explain the difference between NOPAT and net income. Which is a better measure of the performance of a company's operations?
Question 5: What is free cash flow? Why is it the most important measure of cash flow?