By now you have the knowledge of how to evaluate the equity of the
company, analyze the market economy’s behavior, and predict a
company’s future behavior through forecasting. Based on this
knowledge, you will identify and describe business opportunities that
the company should pursue and explain the benefits/costs of these
decisions.
Prompt: In this section, discuss the incremental impact of a
hypothetical, but reasonable, simple new investment project, such as a
new product or facility or a costcutting investment, as an initial step in
thinking about the future. Be sure to address the following:
A.
Based on your knowledge of this organization, what is a likely
investment it would consider and why? Be sure to describe the basic
features of the investment as a foundation for considering its potential
financial impact.
B.
Evaluate the approximate costs and benefits of the investment you
identified, explaining how these would affect your spreadsheet
projections and business decisions. Estimates are sufficient, but should
be grounded in common sense and insight into the organization.
C.
How does the potential investment affect budgeting and related
business decisions? For example, does the investment involve
significant cash spending this coming year, followed by benefits in the
following year? How might that affect shortterm and longterm
spending priorities? Does the benefit outweigh the cost?
