Part I.
1. Read Judges 7:1-7.
How did Gideon assess his risk when called to deliver his people? How did God assess the risk? How do you assess your personal risk in making decisions? Should you use your approach or God’s? Why or why not?
2.Read Acts 26. What decisions were faced by King Agrippa as he listened to Paul’s story? What was Paul like before meeting the Lord? What was he like after meeting the Lord? Should your relationship with the Lord be something that changes you? How?
3. Read Daniel 2.
Did the sorcerers, magicians, enchanters, and astrologers try to interpret Nebuchadnezzar’s dream using irrelevant information? What was the result? What was Daniel’s source of information? Was this a relevant source? How often in your life do you find you consider irrelevant information when trying to understand your circumstances?
4. Read Daniel 1.
How did Daniel and his three friends handle the risk of defiling themselves with the King’s table? Have you ever faced risk which caused you to want to compromise your beliefs? How should one handle those risks?
5. Read Daniel 11:36-45.
Does God reveal what is going to happen in multi-periods? Is the time associated with this passage past, present, or future? Can you depend on what God says as being true and coming true? How does this affect your view of the daily circumstances you face? How does God’s control of the future affect the selection of a political candidate for local, state or national office?
Part II.
1..What does it mean to be risk averse or risk neutral? How important is it to evaluate risk and to evaluate how sensitive to risk any business, personal, or academic decision you have made or are making?
2.What is the essence of Decision Theory? How can the concept of decision theory be used in your business, personal or academic activities?
3. What is an expected monetary value? How does the EMV contrast to the monetary value? Why is it important for a decision maker to ignore irrelevant data? How sensitive is any decision to changes in probability?
4. If perfect information is never available, why consider it? Cite several examples of how you can positively affect or alter the downside risk associated with any decision.
5. Why is it important to know the internal rate of return and the hurdle rate? What is the difference in cash flow and profit? Why go to the trouble of determining the present value for any decision which flows into multi-periods?
6. Create a time value of money Excel spreadsheet for the following two investments:
A. Initial investment ($100,000); Forecasts: Year 1 payback ($25,000); Year 2 payback ($25,000); Year 3 payback ($25,000)
B. Initial investment ($100,000); Forecasts: Year 1 payback ($20,000); Year 2 payback ($25,000); Year 3 payback ($40,000)
Use a re-investment rate of 10%. Calculate Net Present Value (=NPV) for each investment and specify which investment is the most profitable. (You are not required to use the Excel (=NPV) formula but you will find it to be the easiest and most accurate means of calculating Net Present Value.)
Normal
0
false
false
false
EN-US
JA
X-NONE
/* Style Definitions */
table.MsoNormalTable
{mso-style-name:”Table Normal”;
mso-tstyle-rowband-size:0;
mso-tstyle-colband-size:0;
mso-style-noshow:yes;
mso-style-priority:99;
mso-style-parent:””;
mso-padding-alt:0cm 5.4pt 0cm 5.4pt;
mso-para-margin:0cm;
mso-para-margin-bottom:.0001pt;
mso-pagination:widow-orphan;
font-size:12.0pt;
font-family:”Cambria”,serif;
mso-ascii-font-family:Cambria;
mso-ascii-theme-font:minor-latin;
mso-hansi-font-family:Cambria;
mso-hansi-theme-font:minor-latin;
mso-ansi-language:EN-US;
mso-fareast-language:ZH-CN;}