Finance Growth Essay Example | Topics and Well Written Essays - 2500 words

Finance Growth - Essay Example Such decisions consist of allocation of the resources of the firms with carefully laid out plans to recoup the initial investment as well as adequate returns in the form of cash flows or other benefits that are expected to be generated during the economic life of the asset or investment. It is hard to reverse such capital budgeting decisions without severely disturbing an organization economically or in any other manner. Therefore it becomes critically important for any firm to make its capital budgeting decisions after a systematic and careful analysis of all associated risks and issues. But it must be noted that the capital budgeting decisions are many sided analysis. The process of this analysis involves estimation and forecasting of the current and future cash flows and the economic evaluation of alternative projects on hand. "Since in reality the cash flow estimations take place in a non-deterministic environment, full of complex interplay of conflicting forces, an exact descrip tion about cash flows is virtually impossible"(Chandra Prakash Gupta). Therefore it becomes important that the firm attempts to develop procedures and techniques that help the firm to make a meaningful analysis and evaluation of all the alternatives available in its hands before any decision is taken to invest money in any of the projects. This also makes the decisions of capital budgeting risky and difficult to retrieve. Capital budgeting is primarily concerned with fairly large investments in long-term assets. The assets may be tangible like property, plan, and equipment or intangible like new technology, patents, or trademarks. Irrespective of the nature of the assets, the capital expenditures have two characters; one is that they are meant to be a long term investment and secondly their benefits or cash flows are expected to be spread over many years. These characteristic features make the capital expenditure decisions very important for a firm. The capital expenditure decisions since have a considerable impact on the organization's future cash flows there is a considerable

Strategy Essay Example | Topics and Well Written Essays - 1750 words

Strategy - Essay Example For example, a study of "sport consumers" requires response that explains reasons that influence their behavior, and how to get better their behavioral propensity to remain loyal consumers. on the contrary, research on "sport customers" demands results of how to build upon their product knowledge, formulate or change their predilections for a product, and as a result determines how to make the sport product fits their predictable value, personality, and life style. Not all firms in an industry have the same critical success factors in a specific industry.A firm's existing position in the industry where it is next of kin to other competitors in the industry and also the market leader its strategy, its resources and capabilities For example, in 2005 Caterpillar determined a new strategy to aggressively grow revenues over the continuing. As part of that new strategy, Caterpillar described several critical success factors specific to the firm which are the following: Other firms in Caterpillar's industry may or may not have the same factors, and are not likely to have the same complete situation that is why strategies are different practicing in different industries. The strategy of any industry is made by the higher officials of the industry. The reason behind this that why the strategy of the different industries are different Is that all the above mentioned factors are the responsible for it. By difference among these factors, strategies became changed. EXAMPLE OF SAUDI TELECOM Saudi Telecom Company (STC) is the largest service bringer operating both mobile and fixed line businesses in