Questions 1: How are the total risk, non-diversifiable risk, and diversifiable risk related? Why is non-diversifiable risk regarded as the only relevant risk? Do you agree this is correct?
Questions 2: What is the difference between Firm's Operating cycle and cash conversion cycle? Which would be more important to you as an owner and why?
Questions 3: Discuss NPV and IRR. Does the assumption concerning the reinvestment of intermediate cash inflow tend to favor NPV or IRR? Which technique is preferred in practice and why?