Risk Analysis on Investment Decision

Risk Analysis on Investment DecisionSilicon Arts Inc. (SAI) is a four- form-old troupe that manufactures digital imaging Integrated Circuits (ICs) that are utilise in digital cameras, DVD players, computers, and medical and scientific instrumentation. It has movement in North America (70% sales), Europe (20% sales) and South eastbound Asia (10% sales). SAI?s annual sales turnover is $180 million. With the semiconductor unit flourish of 2000, SAI grew by 78%. However, the keep follow undergo a 40% reduction in revenue with an pains slowdown the next year. SAI reduced its costs and froze jacket overstep expenses in response to the reduced revenue. SAI positioned itself to respond to an industry upturn by continuing their research and discipline efforts and developed the IC 1032 strong point chip. With this strategic move and the industry gain in momentum, SAI has see recent revenue growth. With this growth, SAI?s is able to pursue the company?s two-point agenda for the c ompany: Increase market overlap and keep pace with technology. This dead body of work result examine two potential neat investment ends, Dig-image and W-comm, on the watch by a task index championed by the SAI chairman, Hal Eichner.

In the course of this examination, a comparison of web Present shelter (NPV), Internal Rate of Return (IRR) and favorableness Index (PI) among the two mutually exclusive capital investment proposals result be performed. To begin a apprize overview of each proposal will be given. Dig-imageSAI is considering the construction of a spick-and-span Sunnyvale, CA plant to increase its product ion instal of the digital image semiconduc! tor. This comes on the heels of a recent worldwide study that has shown a market growth of 20% in year 1 and an annual growth of 7% from year 2 onward, with a cap in year 5 as new technologies are anticipated to replace the Digital Imaging semiconductor. The capital... If you lack to get a full essay, place it on our website: OrderCustomPaper.com

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