click below
click below
Normal Size Small Size show me how
Finance Test 2
Note cards
| Question | Answer |
|---|---|
| Multiple cash flows | Different amounts over a specified time period. |
| Annuity | Same amount over a specified time period |
| Perpetuity | Infinite cash flow (constant growth and no growth). |
| Ordinary Annuity | Cash flow is at the end of the period. |
| Annuity Due | Cash flow is at the beginning of the period. |
| Capital Budgeting | What long-term investments should a firm take on. |
| Capital | The resources that a company has (i.e. dollars). |
| Incremental Cash flows | FCF asre those that will only occur if the project is accepted. |
| Forecasting risk | How well have you estimated the future revenues, expenses, capex, NWC. |
| Scenario Analysis | Change several variables at once to develop base, best and worst case scenarios for NPV. |
| Sensitivity Analysis | Using your BASE case, change one variable at a time to see which variables have the most impact on project NPV. |