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

Going for growth by investing in people, products and plant 2 - canvas Example interrogation 1 Before making an investment, it is prudent that one possesses an effective understand of the securities industry of operation. This is important in making an informed investment move. The unconscious 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 evaluation through a number of mechanisms which result in the comparison of the business key objectives which are profitability under the real market forces (Willey, 2012). There are a number of investment appraisal methodologies including benefit present economic value which investigates the ability of the market to repay the investment given the numerous present market factors such 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 whitethor n take the business to return the initial investment. Some other investment appraisal method is the account rate of return which bases its assessment of the market on its ability to earn profit to the investment. Despite their diverse approaches to the appraisal, the methods safeguard the interest of the business by trying to determine its profitability and above all its higher rank. The deportment of a business is of great importance to the investor since the longer a business remain viable, the more the investor earns. The party marks an extensive capital investment with the sole aim of achieving the business objective. Capital investment is the amount of currency that the enterprise invests in bushel assets which are directly used before implementing its investment plan. In this case, the satin walnut Sandwiches Company carries out an extensive market research and investment appraisal thereby ensuring that their company bewilders relevant in the evidently dynamic market (Tabbush, 2011). This includes enhancing the work process such as the machinery and the production plant. The company does this after staying in operation for some time it therefore 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 adequate information roughly the market and has its market facts right (Thomas & Michael, 2001). After determining the market size, the company determines its market share which is thence 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 ensure that it does not plough bankrupt in the process since such as scenario might have stifled the pro duction process thereby either incurring 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 part of capital investment. Question 2 The investment decision technique is synonymous to the investment appraisal method. The three discussed in the hold are the playback method, the net present value, and the account rate of return (Alexander, 2010). Despite the fact that they all lede to an appropriate investment decision, they are different in their provisions and therefore possess unique advantages and disadvantages. The net