Business Finance
Assessing the Risk in Three Potential Investments
The way an investment is assessed will include consideration for the level of risk that is present in that investment. The higher a risk associated with a business the higher the required rewards referred to as the risk and reward equation. Where the risk premium increases this will also lead to the use of increased discount levels in discounted cash flow assessments, such as net present value (NPV) calculations. In order to consider the way this may be applied to investment decisions three different business plans may be assessed; Acme Consulting, Interstate Travel Center and Silvera and Sons.
Risk may be assessed using a number of different criteria. From the perspective and an investor, or lender, the key aspect of risk will be the determination of whether or not the money invested or loaned will be returned and whether is will make a profit sufficient to justify the risk (Berry, 2012). This also incorporates an assessment of the viability of the business and the potential financial returns (Reilly and Brown, 2011). The aspect of opportunity cost may also be considered, as an investment in one company may be seen as risk in terms of the potential returns which may have been gained elsewhere where investments are mutually exclusive (Nellis and Parker, 2006).
Acme Consulting
The first of the firms is Acme Consulting. This is a start up firm offering premium consulting services to large high tech manufacturers, such as IBM and HP, and a secondary market of medium sized media businesses, with a head office in the renowned Silicon Valley area; placing them in a key area. The firm is being established by individuals with relevant knowledge in the relevant areas of marketing a consultancy as well as the high tech industry. It is noted that the market for these services is currently fragmented which may provide opportunities, With related diversification of services, including retainer work, market research and project consulting the firm will be able to offer...
Business Finance Sources of Finance Sources of Business Finance Finance is the life blood of every business as all types of businesses need money at every stage of their operation. It is of vital importance particularly for the modern businesses which require huge capitals. Finance is actually the determinant of the firm formation and it not only influences the ability of any firm to enter in the market but also affects its performance
Finance Assessing a Potential Investment in Facebook Under the concept of time value, money today is worth more than the same amount in the future (Nellis and Parker, 2006). This is over time, inflation will erode the value of money and in a years time $100 will buy less than it will buy today. If Facebook is offering a $100,000 bond, for one year, the investor, wanting to make a profit and
Analytics and Business Intelligence Assessing the Impact of Analytics and Business Intelligence The pervasive adoption of analytics to mitigate risk has accelerated due to greater uncertainties in economic conditions, the accelerating pace of change in markets, and a reliance on quantified measurements of performance vs. qualitatively based (Hopkins, LaValle, Balboni, Shockley, Kruschwitz, 2010). The intent of this analysis is to look at how analytics and business intelligence can be used for automating
The size of the market and its characteristics must be considered, to ensure that there is ample opportunity in the market. The expertise of the firm should be a factor, since expertise in a given market, or type of market, can play a significant role in organizational success. The governmental/legal environment must be carefully considered. Each country has its own approach to FDI, some being more open than others. In
Business Risks -- Overview of the Risk Environment There are various types of business risks in the business environment, and these risks, of course, can differ from environment to environment depending on the type of business or organization. The severity and category of the risk also depends on the largeness of the organization and on various other factors, such as location, personality of employer, quantity of employees employed, and so forth
Risk Analysis Background- In general terms, risk management is a way to identify, assess and prioritize risks that are associated with a project or organization. The purpose of risk management is to be proactive in improving places or processes within an organization that may have risks that can be mitigated or controlled -- and to do something to minimize those risks and the financial exposure to them. In almost any organization,
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now