Financial Management: Principles and Applications, 13/e

Study Questions

1. 13–1. Regardless of Your Major: Project Risk for Entrepreneurs on page 410 discussed the risks that entrepreneurs face, with about 40 percent of new businesses shutting their doors during their first year. If you had to pick a business to start, what would it be, and what type of risks might you face?

2. 13–2. What is the objective of project risk analysis, and why is it critical to the investment decision-making process?

3. 13–3. How do you perform a sensitivity analysis of an investment proposal, and what is its purpose? Contrast the use of scenario analysis with that of simulation analysis.

4. 13–4. Finance in a Flat World: Currency Risk on page 422 discussed the currency risk that multinational firms face. Between July 2008 and ...