Managing investments
Order Instructions:
For this paper, the writer will have to read the two post and react to them in one paragraph each. The writer will expand and constructively challenge each of this postings using a minimum of one scholarly article to support his point. each posting respond must have a minimum of 250 words and APA must be use . The writer will respond directly on the uploaded paper with the respond coming directly under each posting as indicated. the references must be in APA format.
SAMPLE ANSWER
It is true that the effectiveness of any investment decision depends on the cash flows, project life, and the discounting factor (Preda, 2009). Before the commencement of the project, an immense understanding of the overall project is critical as this will help provide an economic view whether the project is feasible or not. The time value of money will help assess the feasibility of the overall project by comparing the inflows and the outflows of the overall life cycle of the project (Cornett, Adair, & Nofsinger, 2013). The cash flows consideration needs to be done in combination with the overall life of the project in determining whether the benefits of the project are sufficient to justify the current outlays. The combination of the payback period, the net present value, and the internal rate of returns are significant in determining the feasibility of the project.
The project with a positive net present value is feasible and has positive outcomes of the investment. However, the shortcoming of the net present value is that is does not take care of environmental factors that may also affect the outcome of the project (Cullen & Broadbent, 2012). In this regard, evaluating the capital project requires multiple analyses that also take care of other factors such as environmental influences. In this regard, the optional situation evaluations are good in assessing capital project feasibility as it will provide a clear understanding of the potential of the project, in addition to providing an overview of how much the organization is likely to lose in case the project fails. According to Hightower (2009), the use of decision trees in analyzing the feasibility of the project is also useful as it gives provides the management with the option of abandoning the project during implementation when the net present value turns out to be negative.
References
Preda, A. (2009). Framing Finance: The Boundaries of Markets and Modern Capitalism. University of Chicago Press
Cornett, M., Adair, T., & Nofsinger, J. (2013). M:Finance. McGraw-Hill/Irwin; 2 edition
Cullen, J., & Broadbent, M. (2012). Managing Financial Resources (CMI Diploma in Management Series). Routledge; 3 edition
Hightower, R. (2008). Internal Controls Procedures and Procedures. Wiley https://www.wiley.com/en-us/Internal+Controls+Policies+and+Procedures-p-9780470287170
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