STRYKER CORPORATION INC.

Stryker Corporation Inc.

Stryker Corporation Inc.

Introduction

The Stryker Corporation Inc. is a company that provides surgical instruments to many health care institutions. The changes in technology have enabled firm to produce advance and new products that could provide more and more benefits to the patients in the country and city. Recently the company has decided to adapt the integration strategy in order to produce the PCB an electronic instrument essential for making the medical instruments. The increase in the cost of buying the electronic item was more than making the product. Therefore a business report was needed in order to find that whether the decision of the Stryker Corporation Inc. beneficial or not. The business will provide an analysis of the capital budgeting by using the capital budgeting tool in order to evaluate that the decision will be a profit or a loss.

Discussion

Stryker Corporation is one of the leading manufacturers in the surgical instruments industry. The company has been able to generate profits over the last few years and have always tried to bring improvement in the business that could advantage the company and its customers. The company has three basic business units that are successfully running their operations. PCB is an instrument that is commonly used in all the business units and all the products. It was analysed by the management of the organization that in order to achieve success and future growth control over the supply of the PCB was essential. The manufacturing managers of the company proposed three options among which the third option was opted which was to manufacture the PCB near the headquarters of the company which will increase the supply of the item and will also reduce cost. The financial analysis of this decision will enable the management in deciding either to apply this decision or not and will this investment produce better results for the organization or not.

According to Shapiro (year) capital budgeting will enable the firm in making decisions regarding determination of finances relate to activities, enrolling managers related to the project, returns of the project and analysing the controlling activities to control the cost of the project. The different capital budgeting tools help in supporting the decision whether it should be practically implemented or not. The main tools that will be able to develop an analysis are Net Present Value, Payback Period and calculating internal rate of return. First is the ...