the drawbacks or costs (CONS) of alternatives. More then a simple pros/cons evaluation, this tool forces you to look at ways of ''FIXING” the CONS - resulting in a final 'picture' of the merits and costs (costs = the fixes, along with the cons you can't fix) for a particular alternative. This is a good technique to use when you have only a couple of alternatives to consider. This tool is also good to use when you have identified one or two remaining alternatives after using other tools (eg. Simple
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users of financial statements. They continually assess and compare the prospects of alternative investments. The assessment of each investment is often based on two variables: expected return and risk. Expected return refers to the increase in the investor’s wealth that is expected over the investment’s time horizon. This wealth increase is comprised of two parts: (1) increases in the market value of the investment and (2) dividends (periodic cash distributions from the firm to its owners). Both of
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IFAC Board Exposure Draft November 2012 Comments due: February 28, 2013 Professional Accountants in Business International Good Practice Guidance Project and Investment Appraisal for Sustainable Value Creation IFAC’s mission is to serve the public interest by: contributing to the development of high-quality standards and guidance; facilitating the adoption and implementation of high-quality standards and guidance; contributing to the development of strong professional accountancy organizations
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they join. One of the major benefits in obtaining acceptance into the union would be the ability to freely operate within a large number of countries that currently use the same type of financial policies and monetary practices. Foreign direct investments in another country would also prove advantageous when the market shows a clear need for the product being offered. However, disadvantages to joining the European Union would include the delayed ability to react to particular economic situations
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Boston Retail: Lecture 2 Illustration Boston Retail An edited summary of a case from: Simons, R. (2000). “Performance Measurement & Control Systems for Implementing Strategy”, Ch. 1-5: Foundations for Implementing Strategy & Building a Profit Plan. Background Imagine you are the owner of a small clothing chain in suburban Boston. You started with one small store and a novel idea: to offer cheap but fashionable clothing, along with a selection of decorative merchandise to university students
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as “The only logical way to evaluate the relative attractiveness of investments and businesses.” (Bruner et al, 2009 p.7) It has accorded such importance because it can be used to estimate the value of the businesses ongoing operations and not the companies stock. Through the calculation of the discounted cash flows, and moreover the net present value of the forecasted performance, we can therefore figure out whether the investment holds the potential to generate value. By comparing these amounts to
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Week 6 Elizabeth Glasgow Fitchburg state University MGMT 9170 Saturday, March 26, 2016 Dr. Robert Gohary Abstract One of the most important responsibilities of any corporate financial manager is to decide which, if any, projects or investments opportunities the organization should undertake. The task of analyzing and comparing financials is a daunting task, but when utilizing the tools of capital budgeting, the process of this type of business decision making can be quite useful. This paper
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Philip Anderson 1. Which of the investment alternative: Provides the highest returns to the client? Provides the highest profits to Stuart & Co.? Alternative C provides the highest returns to the client. It has the highest average annual total returns over last 5 years (net of management fees). And its load or commission is moderate. Alternative B provides the highest profits to Stuart & Co. It has the highest management fees, which direct benefits Stuart & Co., and the highest
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the net positive cash flow will be coming back into the business. Since initial investment will be slim to none, this will be imperative. This method’s primary shortcoming is that it ignores the time value of money. This can be overcome if discounted cash flows are used to calculate the payback period. After determining the return as well as the time period, I would then evaluate alternative investments to determine if there are ways to use this money to gain higher returns. Ideally
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Sherrah Adderley Ms. Marjorie Downie Eng 300 October 16, 2012 Should the government invest in solar energy? The impact of high crude prices on the economy has always been negative, resulting in high energy cost. Many Bahamians continue to struggle to keep their lights on due to the constant increases in surcharge on electric bills by The Bahamas electricity Corporation (BEC) .To reduce this energy load, the government should invest in renewable energy such as solar energy. Solar power is
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