In theory, market risk should be the only “relevant” risk. However, companies focus as much on stand-alone risk as on market risk. What are the reasons for the focus on standalone risk?

Most firms generate cash inflows every day, not just once at the end of the year. In capital budgeting, should we recognize this fact by estimating daily project cash flows and then using them in the analysis? If we do not, are our results biased? If so, would the NPV be biased up or down? Explain.

Define (a) sensitivity analysis, (b) scenario analysis, and (c) simulation analysis. If GE were considering two projects (one for $500 million to develop a satellite communications system and the other for$30,000 for a new truck), on which would the company be more likely to use a simulation analysis?

To calculate monthly charges, a cell phone provider uses the equation C = 0.25m + 60, with C being dollars and m representing minutes used beyond the ones provided with the plan. In this linear equation, what is the value of the vertical intercept and what does it represent?

Brandon crafted a clay bowl on a pottery wheel in the shape of a hemisphere. After the clay hardens, Brandon will paint only the outside of the bowl. If the radius of the bowl is 6 inches, what surface area will he paint to the nearest square inch?

If a circle has an area of 144 square meters and a sector of that circle has an area of 12 square meters, what is the angle measure of the sector?

Solve each equation. $3+2 n=4 n+7$

Drive Golf Company has requested that you perform a vertical analysis of its balance sheet to determine the component percentages of its assets, liabilities, and stockholders’ equity. Drive Golf Company Balance Sheet December 31, 2012

$$\begin{matrix} \text{Assets}\\ \text{Total current assets} & \text{\$ 33,000 }\\ \text{Property, plant, and equipment, net } & \text{199,000 }\\ \text{Other assets } & \text{37,000 }\\ \text{Total assets} & \text{\$269,000}\\ \text{Liabilities}\\ \text{Total current liabilities } & \text{\$ 48,000 }\\ \text{Long-term debt } & \text{102,000 }\\ \text{Total liabilities} & \text{150,000}\\ \text{Stockholders’ Equity }\\ \text{Total stockholders’ equity } & \text{119,000 }\\ \text{Total liabilities and stockholders’ equity} & \text{\$269,000}\\ \end{matrix}$$

What reinvestment rate assumptions are built into the NPV, IRR, and MIRR methods? Give an explanation for your answer.

The sun's structure includes _______________.

Why are interest charges not deducted when a project’s cash flows for use in a capital budgeting analysis are calculated?

Explain why sunk costs should not be included in a capital budgeting analysis but opportunity costs and externalities should be included. Give an example of each.

What is the relationship of the portfolio standard deviation to the weighted average of the standard deviations of the component assets?

Would the yield spread on a corporate bond over a Treasury bond with the same maturity tend to become wider or narrower if the economy appeared to be heading toward a recession? Would the change in the spread for a given company be affected by the firm’s credit strength? Explain.