Financial Analysis

[Name of the Institute]Financial Analysis

Introduction

JB HI Fi is one of the biggest growing retailer of the Australia for the home entertainment, that offers the world's leading brands of the Hi Fi, televisions and the speakers along with the cameras, DVD's, VCR's, car sound, home theatre, portable audio and computers and continues for the stock of an exclusive range for the specialized HIFI products.

They also offers the largest range of the video games, music recording, DVD music and the DVD movies along worth the 50000 CDs and also the major studios for the releasing of the DVD, at the less expensive prices. The customers of the JB Hi Fi are able to buy online from their variety of the products of the DVD's CDs and the games. It has having the best brands in the Australia along with the variety of the products of the electronic market at very cheap prices along with the experiencing specialist staff and the convenient locations.

Discussion

Question # 1

A perusal of the report clearly shows that the JB Hi-Fi Ltd does make the capital budgeting decisions of some magnitude as the net present value is the rule that maximized the value of the shareholders, however some of the firms uses other criteria for the decisions of the capital budgeting for instance the IRR, internal Rate of Return, Profitability Index, Payback period and the Return on the Book Value. In some of the cases the decisions for the investments results the internal rate of the return and the index for the profitability method agree along with the Net present value. Decision should be made using the payback period and the return on the book value that are generally suboptimal from the stand point in order to maximize the value of the share holders. The initial goal for the ...