Capital Investment Process

Masters
Essay
Business
Pages 13 (3263 words)
Download 0
Capital investment always presents a serious decision for management. The commitment of funds to capital projects gives rise to a management decision problem. Capital investment appraisal theory tries to find the solution of this problem, through the development of techniques allowing to predict the outcome of every investment…

Introduction

Therefore, it was always implied that despite techniques used to make the future more clear, capital investment decision requires a manager to use intuition.
This study of a Boston Mayflower - a residential social landlord with about 5,000 houses - indicates that more accent must be put on qualitative appraisal techniques. The essay begins with building a theoretical base to get the reader familiar with some basic concepts of capital investment appraisal theory. The second part of the essay is devoted to a step-by-step analysis of the investment project of Boston Mayflower.
This part of the essay is devoted to the description of methods used in the analysis of capital investment. Developed theoretical frameworks include several different techniques of analysis varying mainly in measures of investments. In other words, it is clear that the ultimate goal of every investment is maximisation of owner's wealth; however specific characteristics of every project oblige management to choose carefully and with correspondence to the most vital needs of the business.
The most typical example is the choice between long-term investment project with high return value and short-term project but with lesser return. Although the first development plan will lead to better profits in the end, sometimes a company chooses the second one. ...
Download paper
Not exactly what you need?

Related papers

International Capital Budgeting
In their article, Cooper and Kaplanis investigate the relationship between home bias in equity portfolio management, international capital market equilibrium, and inflation hedging. The authors develop a new model of international portfolio management and discuss the practical implications of using their model in international capital budgeting decisions. Synopsis According to Cooper and Kaplanis,…
Capital Investment Process
Therefore, it was always implied that despite techniques used to make the future more clear, capital investment decision requires a manager to use intuition.…
Investment Essay
(Glossary of terms, n.d.)…
Capital Investment
Even though after the democratic elections conducted in the year 2005, the country has been advised to be a safer destination for capital investments, there have been apprehensions about the stability of the country and the chances of the conflicts arising again which may hinder the sustained growth of the company's operations in the country. Apart from the political risk, there is the issue of…
Investment Banking
In UK the investment banking scenario has undergone radical transformation in the two decades covering the period 1985-2005.In the following paragraphs we probe available literature in order to outline main drivers of this transformation and emerging scenario.…
Capital Funding
Contrary to this as per the advocates of capital funding, it causes encouragement of the development of technologies, managerial expertise, and integration with the world economy, exports and higher growth. Since it is a very much controversial issue, my primary objective will be exploring the all the aspect of capital funding in new business and private sector in developing countries and also…
Investment Law
Unit trusts and OEICs share some common benefits such as diversification, simplicity, and income and growth potential (Jorion, 2005). However, OEICs outweigh unit trusts in terms of benefits that they offer. The key area of distinction is the pricing structure of an OEIC which is more straightforward and transparent. Moreover, OEIC has a more flexible structure in that it can entail a variety of…