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Johnson Control Capital Investment - Essay Example
Finance & Accounting
Pages 5 (1255 words)
Johnson Control Capital Investment Answer 1 Capital investment is one of the most critical strategic business activities of multinational businesses. These companies have to invest huge amount of capital in foreign markets for global expansion business through emerging markets…
Therefore, the company possess huge amount of investment in foreign markets foreign business operations. Theoretically, some traditional and efficient methods are used to evaluate capital investment in domestic as well as emerging foreign markets by businesses. But, capital investment is highly risk associated strategic business activity and the company needs to focus beyond the traditional methods of evaluating capital investments like net present value, internal rate of return, payback period etc. Emerging financial businesses like investment banking and financial research companies offers flawless capital investment solutions to many leading multinational organizations and they follow several advanced methodologies for evaluating proposed capital investment practices by the MNCs especially in emerging markets. The main objective to use beyond the traditional methods is to reduce future risk i.e. these methods helps to identify the maximum extent of risk possibilities and provide alternative solution to reduce the possible risk in substantial extent. One of the efficient methodologies for evaluating capital investment is Salomon-Smith-Barney Model. This methodology is widespread and efficient method used by leading investment banks to evaluate capital investments especially in the emerging markets for reducing risk of investment. ...
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