DISCUSSION QUESTIONS

100 WORDS PER ANSWER

1. The difference between cash flow, profit, and net income.

2. Give an example of an erosion cost. Explain why this cost is part of the incremental cash flow of a project. Is there a case in which a new product should get credit for additional revenue of an already existing product?

3. Why is there typically a tax gain or tax loss at the disposal of capital assets?

4. Explain how working capital relates to the company's ability to generate cash flows.

5. Explain the three components of the cash conversion cycle.

6. What is an economic order quantity? What cost does it attempt to minimize?

7. What are the five stages of a business life cycle? Do all companies go through all five stages?

8. What is the function of the Small Business Administration in regard to business loans? Who receives the guarantee on the loans?