Going for growth by investing in people, products and plant 2 Essay

Going for growth by investing in people, products and embed 2 - Essay ExampleQuestion 1 Before reservation an coronation, it is prudent that one inducees an effective understanding of the merchandise of operation. This is important in making an informed investment move. The process of studying the market and developing an understanding of the same is collectively referred to as investment appraisal. It involves a series of market military rank through a number of mechanisms which result in the comparison of the business key objectives which atomic number 18 arrive atability under the existent market forces (Willey, 2012). There are a number of investment appraisal methodologies including net leave value which investigates the ability of the market to repay the investment given the numerous present market factors much(prenominal) as inflation. One of the most preferred of these methods is the direct payback method in which the investor calculates the number of years it may t ake the business to draw the initial investment. Some other investment appraisal method is the accounting rate of return which bases its assessment of the market on its ability to earn profit to the investment. Despite their different approaches to the appraisal, the methods safeguard the interest of the business by trying to determine its profitability and above all its longevity. The life of a business is of neat importance to the investor since the longer a business stays viable, the more the investor earns. The company makes an commodious chapiter investment with the sole aim of achieving the business objective. Capital investment is the amount of money that the enterprise invests in fixed assets which are directly used before implementing its investment plan. In this case, the Hazelwood Sandwiches Company carries out an extensive market research and investment appraisal thereby ensuring that their company stays relevant in the evidently dynamic market (Tabbush, 2011). This includes enhancing the production process such as the machinery and the production plant. The company does this after staying in operation for some time it and then has an understanding of the market. Its decision to make such an expansive capital investment arises from the understanding that it has for the market. The company, just as any other desires, to stay active in the industry for as long as it takes. It therefore collects comme il faut information about the market and has its market facts right (Thomas & Michael, 2001). After determining the market size, the company determines its market share which is indeed the largest. The subsequent investment therefore arises from the desire to retain the position thus safeguarding both the profitability and the longevity of the company. The company has therefore mapped out its capital investment plan in phases to operate that it does not become bankrupt in the process since such as scenario might have stifled the production process thereby either subject debts or resulting in the eventual closure of the company. While purchasing fixed assets and improving the scale of production, the company also increases its working capital which is also adjourn of capital investment. Question 2 The investment decision technique is synonymous to the investment appraisal method. The three discussed in the article are the playback method, the net present value, and the account rate of return (Alexander, 2010). Despite the fact that they all lead to an appropriate investment decision, they are different in their provisions and therefore possess unique advantages and disadvantages. The net