Risk Analysis

Running head: RISK ANALYSIS in investment funds funds funds DECISION Risk summary in coronation Decision Gina Collins November 3, 2008 Risk Analysis in enthronization Decision Silicon Arts, Inc (SAI) is a four-year-old manufacturer of digital image integrated circuits. The circuits are used in digital cameras, videodisk players, computers, and other digital equipment. Silicon Arts obligate products across North America, Europe, and South East Asia earning annual gross receipts of $180 million. The follow has an agenda to increase profit shares and control the pace with todays technology. SAI presented two capital investment proposals to their Financial analyst to make a final decision. The first proposal tangled expanding the existing Digital Imaging market share (Digi-image) and the ease involved entering into the Wireless Communication market (W-Comm). The companionship will only have the financial and human resources for 1 o f these projects. This paper will analysis the outdoor(a) and internal risks associated when do a decision to accept or reject a situation project. The decision made will be from a discern review of immediate payment flow projections, opportunity costs, NPV, IRR, and the positivity Index.

Net Present Value is an indicator of how much a project will add value to the confederacy. Internal rate of Re rhythm is a measure of how efficient the project is to the company and Profitability Index considers the ratio between future silver flows and initial investment of the project. These terms indicate of how well an inv estment will perform for the company will he! lp turn over a final decision. The first proposal is the tumultuous disturbance of SAIs existing digital imaging market share. Expanding the section has the potency to increase market share from 18% and leave a good competitive advantage in the IC manufacturing market. The expansion will account for 30% of the Companys annual revenue during a 5-year period and would be an gigantic external investment strategy....If you want to get a overflowing essay, enact it on our website: OrderCustomPaper.com

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