1. What is capital budgeting? Discuss the five stages in the capital budgeting process.
2. Suppose a toy manufacturer is faced with the following collection of investment projects:
(a) Opening a retail outlet
(b) Introducing a new line of dolls
(c) Introducing a new action figure in an existing line of action figures
(d) Adding another packaging line to the production process
(e) Adding pollution control equipment to avoid environmental fines
(f) ) Computerizing the doll-molding equipment
(g) Introducing a child’s version of an existing adult board game
Classify each project into one of the four categories: Expansion (E), Replacement (R), New product or market (N), or Mandated (M).
3. Match Stakeholders to their goal:
___Managers ???
___Creditors? ???
___Customers? ???
___Employees? ???
___Suppliers ????
___Owners ???
A) Job security
B) Low risk, return of their money and interest
C) High prices
D) High Salary
E) Dividends or stock appreciation
F) Low prices?