Verified Document

Corporate Finance 3a This Depends On The Multiple Chapters

Corporate Finance 3a) This depends on the project. b) Better than the company or industry average, whichever is higher. C) Higher than the cost of capital. d) e) over 0.

The objection is based on speculation. Since we do not know what the future reinvestment rate is going to be, we must work with the best information we have today.

Again, the objection is the same. A complaint that we have less than perfect information when we are forecasting the future is absurd. We also do not know precisely what the future cash flows will be. We still need to make a decision, and that decision must therefore be made on the basis of the best information that we have today. The criticism has no validity.

Ch 9-1. Forecasting risk reflects the risk associated with forecasting...

There is more forecasting risk for a new product than for a cost-cutting proposal. This is because the new product deals with an unknown -- we do not have any past performance data on which to base our future projections, so there is greater risk of them being inaccurate. The projections for a cost-cutting measure will be based on current data to which adjustments have been made. With more information to assist in the forecast, the forecast for the cost-cutting proposal is going to be less risky. Moreover, forecasting risk for a new product incorporates external demand conditions; much of the forecasted change in a cost-cutting proposal is internal in nature.
2. Sensitivity analysis sees the numbers changed to reflect how sensitive the numbers are…

Cite this Document:
Copy Bibliography Citation

Related Documents

American Corporate Fraud
Words: 1936 Length: 5 Document Type: Term Paper

American Corporate Fraud This new century began with great expectations. However, just as the door of the 21st century opened, September 11th shocked the world and bruised the economy. Then, followed the bankruptcy and corporate scandals of some of America's major corporations. One such Fortune 500 company that fell at the new century's threshold was Enron, one of the world's leading energy companies. Once hailed as the most promising corporation in

Global Economic Giants Brazil Is
Words: 2400 Length: 8 Document Type: Term Paper

They feel they have survived and overcome harsh business environment and want to operate in risky markets like Brazil. Some of them benefited from privatization or part-privatization. The current government dislikes the notion of privatization, which tends to improve businesses. But it likes national champions to succeed abroad. A government minister wrote the World Economic Forum in 1996 that it was not in the interest of the government for

Australia Banking Industry Should Australia
Words: 2301 Length: 8 Document Type: Term Paper

...other corporations and liabilities between financial institutions" are not covered in this scheme. There are restrictions within the framework of this scheme in that each individual, small business or community organization will be able to make "only a single claim against the scheme for each failure of a financial institution..." with all claims that are "relevant" being aggregated. Third parties will excluded from assessing the scheme to avoid a conflict of

Ford Motor Company
Words: 2561 Length: 10 Document Type: Term Paper

Ford Motor Company Analysis Ford's History, Development and Growth As Ford Motor Company itself proudly declares, "The dream became a business." The inception of Ford is one of the critical steps in the industrialization of America and the West in general. According to Ford's public relations department, "Ford Motor Company entered the business world on June 16, 1903, when Henry Ford and 11 business associates signed the company's articles of incorporation. With

Organizational Change of Northrop Grumann Corporation Analysis
Words: 3496 Length: 13 Document Type: Term Paper

Organizational Change of Northrop Grumann Corporation Analysis of Change Northrop Grumman: Interview in relation to Program Mergers & Acquisitions Comparisons Looking to the Future Organizational Change of Northrop Grumann Corporation Although acquisitions did not prove to improve the performance of firms the activities of acquisition persists and government policy toward the industry of defense has approved consolidation for the purpose of cost savings that are nominal at best. Mergers and acquisitions are events that greatly modify the

Post MBA or Post MS Career Plans
Words: 1965 Length: 7 Document Type: Admission Essay

post-M.B.A. Or post-M.S. career plans. How does your past education and experience support your career objectives? What aspects of the Simon School program make it a good choice for your graduate Because of my international background, my experience in positions of leadership, and my experience with charitable activities, my future goals are quite clear. I intend to build on my accomplishments by helping businesses to thrive in a competitive global market

Sign Up for Unlimited Study Help

Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.

Get Started Now