Deciding company to invest based on given data

Related BrainMass Solutions

• Factors of deciding a proposed capital investment

  The solution examines the factors of deciding a proposed capital investment is attractive for a company is given.

• Long-Term Financing/ Dividend Policy and Retained Earnings

  On the hand, a firm which may not be growing at all, may not have enough positive NPV projects to invest its earnings i.e. the firm is cash rich and does not have opportunities to invest the cash.

• Analyzing the given alternatives

  Refer again to the data in (1) above. As a manager, what factor would be paramount in your mind in deciding whether to purchase the new equipment? (Assume the ample funds are available to make the purchase.) 4. Refer to the original data.

• Economic Costs vs. Accounting Costs

  World Airline's profit-maximizing decisions should be based on economic cost, or the cost required to keep the plane in its present use.

• compute the acid-test-ratio

  Lastly, research each company's outlook for the future based on the appropriate financial ratios and/or on summaries of discussions by industry gurus. Sometimes the Acid-Test-Ratio will not be given directly.

• Importance of IRR and NPV in capital budgeting/planning

  This includes deciding which projects to pursue, projecting the costs versus benefits of various investment options, and deciding how to raise the money required to invest in the long-term investment or project.

• Investing in McDonalds and Wendy's

  Given the above risks, before you make your decision on which company to invest into, you have to assess the likelihood of these risks from happening and factor these into your decision making process. QUESTION 3 For this question, I used Yahoo!

• Game theory tools for firms making R&D investment decisions

  There is a discussion of various ways to find the optimal discussion based on the strategic and extensive forms of the game.

• A risk adverse company will increase or decrease its return on investment?

  It is impossible to have a correct data of future cash flows. Since it cannot be exact data, it has to go by its estimate. The estimate is based on past data and the future trends.