Risk Analysis On Investment Decision

Introduction Silicon Arts Inc. (SAI), a four-year-old manufacturing company that produces coordinated Circuits (ICs) for exercising in medical and scientific electronic, maintains an annual gross revenue turnover of $180 million in North America, Europe, and southwest tocopherol Asia (University of Phoenix, 2009). A task force directed by SAI chairman, Hal Eichner, active 2 capital enthronization proposals for analysis: 1) Dig-image proposes expanding mathematical product consider of the Digital Imaging Semiconductor by increase its return base through setting up a set in Sunnyvale, CA. 2) W-Comm proposes production of its IC 1032 on a commercial scale to capture a portion of the selective information enabled agile handset foodstuff, which requires plant, production, and research and development capital outlay. This penning considers two proposals in the context of internal investment strategies, away investment strategies, and risks associated with investment decisi ons. Valuation Techniques to External Investment Strategies SAIs securities industry research indicates that the mobile handset merchandise allow for stretch to grow rapidly over the next sevener years, 50 % are data enabled and will require semiconductor unit chips much(prenominal) as the IC 1032.

Predicting sales in excess of 15 % in years 2-3 and four percent of the global market in year 4, expansion into the mobile handset market promises an increase in revenue and shareholder wealth. However, competition and correspond products were identified by SAI as possible barriers to entry, causing a potential five percent fall in chime in years 2-3 (U! niversity of Phoenix, 2009). With a marketing strategy that includes a robust distribution network and expansion into global markets, SAI violence benefit from the synergies derived from the acquisition of a company that is strong in these areas. Ross suggests four types of synergy gained through acquisitions: 1) revenue enhancement, 2) cost reduction, 3) regulate down taxes, and 4) lower cost of capital (2005). The merger should be considered if the...If you fatality to get a full essay, order it on our website: BestEssayCheap.com

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