Business Assignment



Investment Analysis

Introduction

An investment is an outlay of money and other financial resources fluids, in order to obtain net profits in the future. The investment analysis attempts to answer two questions:

Given an investment, investment analysis provides information on the convenience of it.

Given several investment options, investment analysis will provide information about which of them is more advisable.

There are different approaches for investment analysis. Basically, you make an investment that has the highest NPV, provided that the company can withstand the financial burden. The investment analysis will also have to consider the risk of it, which is expressed by the volatility of the NPV or the likelihood that you cannot meet the expenditures required to continue the project. Usually this analysis is performed using a sensitivity analysis.

This paper discusses the choice of investment and reasons for investing this project and reasons for not choosing the other option.

Discussion

An investment analysis model can never predict exactly how the variables behave in the future, but they are required to have objective information and to find weaknesses that may jeopardize the investment project. For example, you can jump to light that the profitability of a project will be much more affected by price volatility of some input that other investment alternatives.

Investment of 5 million USD

 

 

 

 

Natural gas corporation

 

Lancettes Corporation

 

5000000

 Return

5000000

Return

18%

900000

8%

400000

900000

400000

25%

1250000

10%

500000

Looking at the above returns, we can see that natural gas corporation is much favorable than Lancettes Corporation. But, if we see other factors they are not favoring the Natural gas Corporation. As the major aim of the investment is to increase the value of the firm along with balancing the reputation of the University within the community, it is recommendable to invest in the Lancettes Corporation as it is the R&D companies that focused on providing safer and more complete care for patients entering the Emergency Room with a suspicious infectious disease (Gradl, Youngblood, Componation, & Gholston, 2009).

They are developing a complete assessment monitor that would take all of the pertinent data from the patient and keep caregivers away from whatever disease the patient is suspected of having. This would advance medical care in emergency rooms and on the floor and also protect other patients from disease

Reason to invest in Lancettes Corporation

Investment in health R & D gives yield of 1000%

Investments in R & D directly contribute to the accumulation of knowledge, leading to new products or production process and also contribute to improving productivity. A distributive feature of investment in R & D is that the benefits derived are spread among companies. The productivity growth in an industry depends, therefore in its own R & D activities over the efforts of other sectors ID generators of knowledge, i.e., productivity growth is determined by cumulative R & D activities .

Externalities ID

The importance of these externalities ID (difference between private and social returns on investment in R & D) as an engine of productivity growth generated a growing interest regarding the sources of such externalities. Therefore, we have found, since the early ...