1.		Both net present value and the internal rate of return incorporate
the same data and utilize the same time value of money theory in their
computations. Given this, why is net present value considered to be a
superior measure when making capital budgeting decisions?
	
2.		Explain what we obtain when we compute the Equivalent Annual Cost
(EAC) .   Explain why or under what conditions EAC is used.
	
3.		One industry with a high degree of operating leverage is the
automobile manufacturing industry.   Why does this industry have a
high degree of operating leverage?
	
4.		Explain why it is that in an efficient market, investments have an
expected NPV of zero.

5.		Discuss how diversification actually works to reduce portfolio
risk.  Provide some examples to illustrate your response.