Net Present Value and Discussion Questions

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Week One Discussion Questions

What is the capital market? How is the primary market different from the secondary market? In your opinion, are these markets efficient? Why?

What are three primary roles of the U.S. Securities and Exchange Commission (SEC)? How does the Sarbanes-Oxley Act of 2002 augment the SEC’s role in managing financial governance? Do you think businesses became more ethical after Sarbanes-Oxley was passed? Provide examples to support your answer.

What ratios measure a corporation’s liquidity? What are some problems associated with using such ratios? How would the DuPont analysis overcome these problems?

Week Two Discussion Questions

How do you define strategic planning? What are some differences between strategic and financial planning? What financial problems might an organization encounter when implementing a strategic plan?

What information is needed to prepare a cash budget? What is the relationship between an operating and a cash budget? Why is it important for an organization to prepare a cash budget

What is the break-even point? What decisions does the break-even point help an organization make? What actions might an underperforming organization take to reach the break-even point?

How do you explain the use of time value of money (TVM) in business? What considerations are made when calculating TVM? How may you use TVM to create your own, or someone else’s, retirement plan?

Week Three Discussion Questions

How do you define working capital? What may happen if an organization neglected to manage its working capital? What techniques do you recommend for your organization? Why?

What is capital planning? Why is the internal rate of return important to an organization? Why is net present value important to a project? How do you select from multiple projects presented to your organization?

What is a lease? Why would you choose to lease instead of buy a capital item? What steps would...
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