Investing in TUFS Essay

4. What additional information does Harris need to complete her analyses and compare the two projects? What specific questions should she ask each of the project sponsors?

Evaluating the risks, calculating the probability of success, and factoring in the projected profit from sales will provide a clearer NPV to be compared with other projects in the

This solutions manual provides the answers to all the review questions and end-of-chapter problems in Financial Management: Principles and Practice, by Timothy Gallagher. The answers and the steps taken to obtain the answers are shown. Readers are reminded that in finance there is often more than one answer to a question or to a problem, depending on one‘s viewpoint and assumptions. One answer is

Along with the Benefit Measurement Method, Constrained optimization method can also be used which involves mathematical approach. Since this method involves the mathematical approach, several calculations are performed in order to take a decision to accept or reject the project. “Mathematical models, also known as Constrained Optimization Methods, are a category of project selection methods, which is a tool and technique of the Develop Project Charter process” (PMP, 2008). Cost-benefit analysis is one of the methods which fall into this category. All the positives and negatives of the project are taken into consideration and then the negatives are carefully excluded from the benefits. Different results are produced for the different projects. The most worthy and financially rewarding option are selected from these results. When employing this method, there are many things that are to be considered such as the impact of the decision on the development of the organization in the future, the length of time the equipment lasts and whether it is possible to do the cost control during the project.

When implementing project 1, you face technical and market risk. How would you assess the risks embedded in Project 1?

Our approach is an active security selection with passive asset allocation. We invest heavily in common stocks, but vary our holdings to include companies of all sizes and industry groups. We seek to achieve sufficient diversification by abstaining from investing more than 5% of the total assets in a single security unless it has significant upside potential, and we make an exception for ETFs and index funds as they represent a basket of securities. Our main goal is to identify and invest in common stocks with high potential for both short- and long-term capital appreciation. Our secondary goal is to invest in common stocks with steady income. When potential for rewards are high, we also enter into derivative

We should accept the project because of the positive NPV and high IRR. We will gain $532 million in wealth which is a big money on the scale like this. The company has a bond rating of AA that makes the risk relatively low. So we should definitely say yes.

Marketable strategies changed over the life of the framework, however the venture was not reassessed. The undertaking had income creating and value sparing chances; however, now just cost sharing is imperative. No achievement measurements were constructed forthright and business officials and supervisors had no clue simultaneously, their accomplishments were not in association in at any rate with the framework. The significant issues with the TUFS are all the business parts, the CFO Freeman and the supporters have a malicious believed that the framework is costing more and didn't convey the right things and is not increasing the value of the organization.

1. Describe the investment strategy employed by DFA. Does DFA consider itself an active or passive manager? What aspects of its strategy are active? What aspects are passive?

The company should accept this project. The project payback period is between 2 to 3 years.

The question that transcends the project is whether equity investors be sufficiently rewarded to justify there financing interests. The answer to this question is dependent

How attractive is the Super project in strategic and competitive terms? What potential risks and benefits does General

Difficulty in finding similarities in markets or operational capabilities; Tata has more than 100 operating companies in seven main business groups doing business in 80 countries: chemicals, information systems and communications, consumer products, energy, engineering, materials, and services. It’s difficult to find similarities in markets or operational capabilities, so they need more effort to develop to different strategies for different markets especially for consumer products. More complex and challenging process of managing strategically it face.

3. What are the biggest risks faced by the firm in the next 5-10 years?

Mutual funds are an easy, convenient way to invest, without having to worry about choosing individual stocks. A mutual fund can be defined as a single portfolio of stocks, bonds, and/or cash managed by an investment company on behalf of many investors. The investment company manages the fund, and sells shares in the fund to individual investors. When one invests in a mutual fund, they become a part-owner of a large investment portfolio, along with all the other shareholders of the fund. The fund manager invests the contributions when shares are purchased, along with money from the other shareholders. Every day, the fund manager counts up the value of all the fund's holdings, figures out how many shares have been purchased by