公司理财第8章.docVIP

Chapter 8: Strategy and Analysis in Using Net Present Value Concept Questions - Chapter 8 8.1 ( What are the ways a firm can create positive NPV. Be first to introduce a new product. Further develop a core competency to product goods or services at lower costs than competitors. Create a barrier that makes it difficult for the other firms to compete effectively. Introduce variation on existing products to take advantage of unsatisfied demand Create product differentiation by aggressive advertising and marketing networks. Use innovation in organizational processes to do all of the above. ( How can managers use the market to help them screen out negative NPV projects? 8.2 ( What is a decision tree? It is a method to help capital budgeting decision-makers evaluating projects involving sequential decisions. At every point in the tree, there are different alternatives that should be analyzed. ( What are potential problems in using a decision tree? Potential problems 1) that a different discount rate should be used for different branches in the tree and 2) it is difficult for decision trees to capture managerial options. 8.3 ( What is a sensitivity analysis? It is a technique used to determine how the result of a decision changes when some of the parameters or assumptions change. ( Why is it important to perform a sensitivity analysis? Because it provides an analysis of the consequences of possible prediction or assumption errors. ( What is a break-even analysis? It is a technique used to determine the volume of production necessary to break even, that is, to cover not only variable costs but fixed costs as well. ( Describe how sensitivity analysis interacts with break-even analysis. Sensitivity analysis can determine how the financial break-even point changes when some factors (such as fixed costs, variable costs, or revenue) change. Answers to End-of-Chapter Problems QUESTIONS AND PROBLEMS Decision Trees 8.1 Sony Electronics, Inc., has deve