1. Debt and equity financing of a venture requires a return to the providers. Describe the forms in which a provider of debt and the provider of equity receive their return. Which is more expensive for the firm? Which is more risky for the investor and for the company?
2. Which processes or concepts involved in developing forecasted financial statements can be applied to cash forecasting? Write a paragraph about the similarities and the differences. Should the same people be involved in both processes? Why or why not? Which process is critical for a small business owner? Why?
3. Opportunity costs are not usually quantifiable. Do you think that opportunity costs should have a place in the working capital or capital expenditure processes? Why or why not? If you were to suggest a way to quantify opportunity costs, what will your suggestion be?