How important are assumptions in preparing a business project feasibility? Justify your answer. What is an example of a faulty assumption and how does it affect the financial study of the project feasibility?
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Q: hich project should the company pursue? Why?
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How important are assumptions in preparing a business project feasibility? Justify your answer. What is an example of a faulty assumption and how does it affect the financial study of the project feasibility?
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- How might one logically assess whether the acquisition of investment information or advice is economically justified?Briefly review the sensitivity analysis that is presented in the case exhibits. Under what circumstances is this project financially attractive? What bets were the company making when they went ahead with the project? DO NOT HAVE TO PERFORM YOUR OWN SENSITIVITY ANALYSIS. YOU ARE TO INTERPRET THE SENSITIVITY ANALYSIS THAT IS GIVEN.What are the main constraints or obstacles to implementing the investment management concept?
- Compare and contrast the differing methods that can be used to account for risk within the context of financial managers analyzing the viability of project investments.Which of the two alternatives should be selected? Show all calculations. Are there any qualitative or non-financial factors that the firm should consider in the decision making process?Stakeholder involvement is very crucial in the EIA. Then What challenges will the project face if the stakeholders were not properly involved in the EIA of the project?
- In each of the different stages in the development of a new venture, what are the different funding requirements? Which funding option is right for a finacial manager?How does an investment appraisal technique help companies move in the right direction regarding an investment decision? What are some of the factors that the decision makers need to consider in making their final investment decision?While the NPV is proven to be the correct way of analyzing projects, it seems that its accuracy is enhanced by use of the IRR to determine how sensitive the NPV is to the cost of capital. Given this apparent reality that both tools contribute critical information to final business decisions, shouldn’t both the NPV and IRR be included in every analysis?
- In pursuing one’s investment objective, which is specified in terms of return requirement and risk tolerance, one should bear in mind the constraints arising in the investment process. What could be these investment constraints? Describe with examples.Define and explain the agency problem in terms of differences in ability to diversify risk by finance and human capital. Why does it arise? What are the mechanisms available to ameliorate the agency problem?Explain how you would evaluate the expected rate of return from the investment (purchasing a company) and the method to evaluate the investment decision. Assess the disadvantages and advantages of the investment method and why the method would provide the most accurate measure for the anticipated rate of return requirement. Justify your recommendation.