Finance Growth

Masters
Essay
Miscellaneous
Pages 10 (2510 words)
Download 0
The project is acceptable because it yield positive NPV at the required rate of return of 9 percent. Moreover the Internal Rate of Return (IRR) on the project is 34 percent as calculated above which is a very good return the company can expect from the project.

Introduction

Such decisions consist of allocation of the resources of the firms with carefully laid out plans to recoup the initial investment as well as adequate returns in the form of cash flows or other benefits that are expected to be generated during the economic life of the asset or investment. It is hard to reverse such capital budgeting decisions without severely disturbing an organization economically or in any other manner. Therefore it becomes critically important for any firm to make its capital budgeting decisions after a systematic and careful analysis of all associated risks and issues. But it must be noted that the capital budgeting decisions are many sided analysis. The process of this analysis involves estimation and forecasting of the current and future cash flows and the economic evaluation of alternative projects on hand. "Since in reality the cash flow estimations take place in a non-deterministic environment, full of complex interplay of conflicting forces, an exact description about cash flows is virtually impossible"(Chandra Prakash Gupta). Therefore it becomes important that the firm attempts to develop procedures and techniques that help the firm to make a meaningful analysis and evaluation of all the alternatives available in its hands before any decision is taken to invest money in any of the projects. ...
Download paper
Not exactly what you need?

Related papers

GDP growth
This paper seeks to enquire how far the title of this essay "In today's economic climate, any company that hasn't borrowed as much as it can is crazy" is relevant within the context of corporate finance principles. That is, when business opportunities abound, is it wise on the part of the firms to watch as silent spectators without grabbing them and execute them by means of borrowed capital. The…
Corporate Finance Issues during the First Five Years of a New Company
Accumulated losses of the first 3 years have only been neutralized in the last accounting period for which actual results are available. Consequently, the company has never declared a dividend, and does not even forecast one for the first year of forecasted business results.…
Finance Growth
Such decisions consist of allocation of the resources of the firms with carefully laid out plans to recoup the initial investment as well as adequate returns in the form of cash flows or other benefits that are expected to be generated during the economic life of the asset or investment. It is hard to reverse such capital budgeting decisions without severely disturbing an organization economically…
Business/Finance (islamic Finance)
This sheer increase in the number of banks and their market capitalisation is a point of concern for financial analysts and public in general. Is it a short lived tale, is it here to stay, what could be the determinants of such high growth, will this growth continue, and what could be some of the challenges it will face in years to come. These are all questions that arise in any mind that sees a…
Finance Investment
Finance is important, because a business needs to forecast where the business is heading. It needs to know if it is making any profitability, what is to be achieved, what are the costs, the risks, and how to acquire the financial needs. Similarly investment is also important to us, because a dollar today may not be worth a dollar in future. Some of the reasons given below have prompted me to…
Finance and Growth Strategies
In fact, more mature companies tend to have better payout ratio, with regular increases in the rates. The firm's dividend policy is generally affected by a number of factors like;…
Finance and Growth Strategies Essay
The results are shown in Table 1.…