Here is the synopsis of our sample research paper on Capital Assessment at Guillermo Furniture. Have the paper e-mailed to you 24/7/365.
Essay / Research Paper Abstract
This 6 page paper looks at a case supplied by the student; Guillermo Furniture. The different ways that capital investment may be assessed are discussed and then the pitons are considered using the NPV method.
Page Count:
6 pages (~225 words per page)
File: TS14_TEgillcap.rtf
Buy This Term Paper »
Unformatted sample text from the term paper:
many ways of evaluating a potential investment. The most basic may be seen as the calculation of the pay back period. The payback period is calculated as the time
take for the amount invested to be earned back. The payback period alone does not allow for the time value of money, such as inflation as well as the influence
of opportunity cost. The value of money earned in the future is worth less than the same amount of money earned in the present. The payback period can be calculated
in a different ways; using discounted cash flow may help to account for issues such as the time value. This will obviously favour investments where there is a short term
return. Where a firm has a high opportunity cost associated with the capital that is tied up for the project there may be a preference to projects that have a
short pay back period. A different approach to investment assessment is that of the accounting return. This is a simple approach where the average net profit (after depreciation) is
divided by the average investment. The average investment is taken by calculating the average value of assets that are tied up within the project. This can give a figure that
can make comparisons between different types of projects, but as large projects will require larger investments it is not necessarily that useful as it does not give a clear indication
of the level of return, only the efficiency. The net present value can also be a useful tool, this is one of the most commonly used investment assessment
tool. This takes the future cash flow of the business and projects them forward, and then discounts them by a discount rate to allow for the time value of money,
...