Net Present Value and Discussion Questions free essay sample

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 recom mend 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 you follow to decide whether to lease or buy a computer system? Week Four Discussion Questions †¢What are main elements in calculating the cost of capital? How does an increase in debt affect it? How do you identify an organization’s optimal cost of capital? †¢What is meant by weighted average cost of capital (WACC)? What are some components of WACC? Why is WACC a more appropriate discount rate when doing capital budgeting? What is the effect on WACC when an organization raises long-term capital? What is an initial public offering (IPO)? How does an IPO allow an organization to grow financially? When is a merger or an acquisition, instead of an IPO, more appropriate? Week Five Discussion Questions †¢What is meant by foreign exchange risk? What specific problems does foreign exchange present in an organization? How may an organization that needs Euros in 6 months protec t itself from currency fluctuations? †¢What is globalization? Why has globalization become so important during the last 10 years? How will globalization change financial management in the future?