1. Discuss how capital budgeting procedures might be used by each of the following:
a. Personnel managers
b. Research and development staffs
c. Advertising executives
2. What is a mutually exclusive investment project? An independent project? A contingent project? Give an example of each.
3. What effect does capital rationing have on a firm's ability to maximize shareholder wealth?
4. What are the primary types of capital investment projects? Does a project's type influence how it is analyzed?
5. Cash flows for a particular project should be measured on an incremental basis and should consider all the indirect effects of the project. What does this involve?
6. What factors should be considered when estimating a project's NINV?
7. Depreciation is a noncash expense; why is it considered when estimating a project's net cash flows?