Business Accounting Essay Example | Topics and Well Written Essays - 1000 words - 1

Business Accounting - Essay Example The project is acceptable as both methods show positive outcome in terms of payback period as well as PV of net inflow of the project. Risk is inherent in almost every business. This is more prominent in capital decision making as such decisions involve cost and benefit extending over a period of time. During this long period of time many thing get changed in an unexpected way and hence the risk of return is always there in capital budgeting decisions. The project under consideration carries a medium level of risk. At the same time it is given that the company’s estimate of future cash flows of 10% is too high. A higher discount rate means higher returns. The principal is that higher the risk higher is the returns. If the company considers the medium level of risk for investments under consideration, then this 10% rate calculated on an estimate of higher risk level require suitable adjustments. In other words the rate of discount has to be lowered to the accepted level of medium risk. The company should develop a risk adjusted discount rate. If the company considers the risk of the project equal to the risk of existing investments of the company, then the discount rate of average cost of capital should be considered for evaluating the project. When the risk of the project is greater than the risks of existing investments, then the discount rate used should be higher than average cost of the capital employed with the company. If the risk of the project is lower than risk of existing investments, the discount rate used to evaluate the project should be lower than the average cost of capital employed. In our case the company is expecting medium risk on the project, it is suggestible that average cost of the capital employed be considered as the discount rate to project future cash flows and then discount those cash flows at present value at that average rate of discount in order to compare with present value of net outflows. The calculated discount rate

Manging Capability Essay Example | Topics and Well Written Essays - 3250 words

Manging Capability - Essay Example China’s involvement with Bahrain is intriguing, especially because China sees companies such as MENA Telecom as key to a burgeoning market in the Middle East. This Chinese influence regarding telecommunications will be discussed here. Introduction Gutenberg’s invention of the printing press has caused vast changes in information sharing especially during the age of industrialization. Just as the printing press changed the way books, and thus knowledge, were disseminated, the Internet has also had a large impact on the way people communicate in this age. The youngest among the different forms of media present in this time, the Internet has rapidly evolved into one of the most popular media that has changed the way people all over the world share information. In a research by Anmuth et. al for the Lehman Brothers Internet Data Book (2008)1, the Internet ranked second with radio among the most utilized media, both garnering 19% behind television’s 33% consumption sh are. ... Wave 3 (2008)2, a global study by Universal McCann on the Internet as a social medium, identified the most popular activities that Internet users do when they log online. These activities range from watching and uploading videos online, reading and updating blogs and maintaining accounts on social networking sites. These activities changed media users from mere passive audiences, to producers of information. Thus, it is safe to assume that the Internet and other forms of electronically-mediated communications are a staple of everyday life.3 However, one of the biggest untapped markets for the development of the Internet is China. Studies reveal that there have been a rapid growth in Internet user in the People's Republic. From 670,000 Internet users in 19974, Chinese citizens who logged onto the Internet increased to 2.1 Million in just two years.5 A decade ago, a report by the China Internet Network Information Center (CNNIC) revealed the Internet statistics of the country: 8.92 mil lion computers that can access the Internet used by 22 million users.6 The report also identified 265, 405 sites and domains with Internet suffixes such as .org, .cn or .com.7 Internet-based businesses have turned their efforts towards penetrating the vast Chinese market. In 2000, China generated U.S. $9.32 billion in E-commerce revenue with U.S. $9.27 billion of this coming from business to business transaction and the remaining U.S. $47.1million from everyday Internet consumers.8 And with China's Internet population reaching 384 million by the end of 2009 and increasing to 420 million9 by the middle of 2010, these numbers reinforce analysts' claim that China is the next lucrative Internet and mobile market in the world, surpassing even both Europe and the United