Risk Analysis On Investment Decision

Introduction Silicon Arts Inc. (SAI), a four-year-old manufacturing company that produces merged Circuits (ICs) for exercising in medical and scientific electronic, maintains an annual gross revenue turnover of $180 million in North America, Europe, and atomic number 16 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 production consider of the Digital Imaging Semiconductor by change magnitude 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 entropy enabled agile handset foodstuff, which requires plant, production, and research and development capital outlay. This stem considers two proposals in the context of internal investment strategies, impertinent investment strategies, and risks associated with investment decisions. V aluation Techniques to External Investment Strategies SAIs commercialize research indicates that the mobile handset market place volition stretch to grow rapidly over the next seven years, 50 % are data enabled and will require semiconductor 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 agree products were identified by SAI as possible barriers to entry, causing a potential five percent fall in to ll in years 2-3 (University of Phoenix, 2009! ). With a marketing strategy that includes a robust distribution network and expansion into global markets, SAI creator 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) throw 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

If you want to get a full essay, visit our page: cheap essay