- What did the lecturer say another term for Asset Investment Decision was?
- What are some of the companies he mentioned that use asset investment decisions?
- What model is going to be used for the presentation? What did he say was needed for this model?
- Identify and discuss the 4 assumptions to be used throughout the presentation?
- Discuss, in your own words, the question he asked “Why in theory does the firm value go up $6405?” Do you understand the idea behind this theory?
- Why does knowing how the money will be spent impact whether you will lend it? Give a personal example of how you have used this idea in lending something.
- What is the discount rate for a project with no risk? Why is this the case?
- What are the advantages and disadvantages of NPV?
- What did he mean when he said that “options have value?” How does this impact NPV?
- How did he define payback period?
- What are the advantages and disadvantages of payback period?
- Discuss this notion, “If NPV rules, why bother calculating payback period. (Two reasons)
- What is IRR?
- What is the decision rule for IRR?
- What was the decision rule pitfall 1? Why did it change?
- What is profitability index?

What is the decision rule for PI?

- What is the problem with using NPV criteria for mutually exclusive projects with unequal lives?

- Discuss the concept of equivalent annual cost