Capital Investment Decisions

Capital Investment decisions are usually large-scale financial decisions made in
keeping with long term organizational goals, such as building a new hospital, building or obtaining new
expensive equipment. They can be strategic , expansive, or a replacement decision involving a major asset.
Two common methods for evaluating these decisions are Net Present Value (NPV) and Internal Rate if Return
(IRR) Would you use one method over the other or both, if you were the decision maker? And why?
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Sample Solution

frastructure projects in Pakistan amounted to about US $ 1.6 billion, while the trade between two countries was around $ 133 million (Pakistan Foreign Relations, 1998-99).

At that time the Turkish special Ambassador Candan Azer visited Pakistan in February 2000 to communicate a message of Turkish President to the Chief Executive of Pakistan. Turkish Minister of State and Chairman Turkey-Pakistan Joint Ministerial Commission also visited Pakistan from 10-14 April 2000. Further inaugurating Chashma Right Bank Canal Project (awarded to a Turkish firm), he made depth discussion with the Pakistan’s Minister of Commerce and Communication. At the same time Pakistan-Turkey Military Consultative Group hold on its 11th meeting at Rawalpindi in November 2000. A high-level Turkish delegation was participated in Pakistan Military Hardware Exhibition, IDEAS 2000, held in Karachi in November 2000 (Pakistan Foreign Relations, 2000).

On 16 December 2001, Turkish Foreign Minister, Ismael Cem visited Pakistan on his way to Afghanistan. During his stay in Islamabad, he entitled on the Pakistan’s Foreign Minister and seized discussions on bilateral issues of mutual interests.

During the year 1999-2000 the trade status between Turkey and Pakistan were to the tune of US $67 million only. Pakistan’s exported to Turkey cotton yarn, cotton fabrics, synthetic fabrics, finished leather, sports goods, toys, carpets, oil seeds, rice etc. The main items of import from Turkey were machinery parts, and vegetables preparations, crude rubber, synthetic fiber, aluminum and steel, transformers, etc. (Pakistan Foreign Relations, 2001).
Turkish Prime Minister Erdogan visit Pakistan June 2003
On 15 June 2003 Turkish Prime Minister Recep Erdogan on his three days visit to Pakistan discussed enhancing the regional security and trade and economic links. Mr.

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