1. Why should the required rate of return for a capital budgeting problem be project specific? Doesn't the firm just have to satisfy an overall cost-of-capital requirement?
2. What is the conceptual foundation of the flow-to- equity approach to capital budgeting?
3. What is the weighted average cost of capital?
4. Should a firm ever accept a project that has a negative NPV when discounted at the weighted average cost of capital?
5. Can you do capital budgeting for a foreign project using a domestic currency discount rate? Explain your answer.