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- How important are assumptions in preparing a business project feasibility? Justify your answer. What is an example of a faulty assumption and how does it affect the financial study of the project feasibility?Which of the two alternatives should be selected? Show all calculations. Are there any qualitative or non-financial factors that the firm should consider in the decision making process?Discuss and explain in details the five most typical and common mistakes when making assumptions for and preparing cashflow projection for investment project proposal?
- Which of the following is also known as what if analysis? a. None of the options b. Sensitivity analysis c. Risk analysis d. Project analysisThoroughly discuss why the asymmetric information is an obstacle to the direct finance? Give examples of moral hazard and adverse selection problems and possible solutions.Define and explain the agency problem in terms of differences in ability to diversify risk by finance and human capital. Why does it arise? What are the mechanisms available to ameliorate the agency problem?
- Is the WACC set by investors or by managers and how (with theoretical concepts)? Please provide well explained and detailed answer without plagiarismCompare and contrast the differing methods that can be used to account for risk within the context of financial managers analyzing the viability of project investments.Explain in details the differences between the two typical analyses - Sensitivyty Analysis and Scnario Analysis. How can they help draw a sensible and convincible conclusion for the investment project proposal?
- Capital Asset Pricing Model is based on certain assumptions, which have been criticized after empirical testing of the model. Discuss the critique of the model in the context of those assumption. Also discuss the empirical findings of the CAPM. What sort of models have been presented to overcome the drawbacks of CAPM?explain why it is important to understand that capital budgeting is subject to the validity of the forecasted data. Additionally, explain whether this reduces the reliability of these types of tools. Are there any other alternatives, or are these tools some of the most reliable that currently exist?What are some of the problems is using AFN equation to estimate AFN rather than the pro-forma financial statement method?
