Decision Analysis II
1. Identify guidelines by which we measure cash
2. Explain how a projects benefits and costs that
is, its free cash flowsare calculated.
3. Explain the importance of options, or
1. Frame and Main Contents
Concept and Theory and
2. Core Concept and Indicators
1Why Buy StocksTo Ear
Decision Analysis I
Discuss the difficulty encountered in finding profitable projects in
competitive markets and the importance of the search.
Determine whether a new project should be accepted
Financial Forecasting and
1. Use the percent of sales method to
forecast the financing requirements of a
2. Describe the limitations of the percent of
sales forecast methods.
3. Prepare a cash budget and use i
1. Describe the trade-off between paying dividends and
retaining (reinvesting) firm profits.
2. Does dividend policy affect the companys stock price?
3. Discuss the constraints on dividend policy, commonly
Distinguish between business and financial risk.
Use break-even analysis.
Understand the relationship between operating, financial,
and combined leverage.