Capital budgeting is the process of evaluating and selecting long-term investments that are in line
with shareholders’ wealth maximisation objective.
Required:
a) State and briefly explain any THREE capital investment evaluation techniques known to you
b) State the advantages and disadvantages of any TWO of the capital investment evaluation
techniques you discussed in (a) above.
Capital investment evaluation techniques
Capital investment analysis is a budgeting procedure that companies and government agencies use to assess the potential profitability of a long-term investment. For example, constructing a new production facility and investing in machinery and equipment are capital investments. There are several capital budgeting analysis methods that can be used to determine the economic feasibility of a capital investment. They include the payback period, discounted payment period, and net present value. A simple method of capital budgeting is the payback period. It represents the amount of time required for the cash flows generated by the investment to repay the cost of the original investment. For example, assume that an investment of $600 will generate annual cash flows of $100 per year for 10 years. The number of years required to recoup the investment is six years.
This document provides an overview of the operational requirements in terms of fire safety. It details many perceived fire safety hazards across the venue through its various phases including build up; the event and de-rig which focuses on and is relevant to all visitors to the site including staff, contractors and the general public. Discussion: This document provides the venue, event manager and all other key stakeholders with a tool to analyse potential hazards to personnel from a fire safety point of view. It enables the level of perceived risk to be calculated alongside the likelihood of occurrence that can then be used to ascertain overall risk. This used effectively allows the event manager to formulate methods to reduce or remove the risk of injury from a potential hazard. Once a reduction method is in place the risk factor is recalculated providing an amended indicator. This action allows demonstration of ongoing work to mitigate risk to personal on site that is often focused upon by key stakeholders. This tool is highly useful in terms of providing a safe environment and complying with current relevant legislation. Live 8 Event Safety Plan Description: This document provides the information and documentation pertaining to the entire event, it includes detailed guidance and procedure for all elements of the event including the build and de-rig phases. The document explains in detail the fundamental elements required for the event to operate safely, successfully and in line with legislation. Discussion: