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Risk Analysis On Investment Decision

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“An acquisition has four sources of synergy: revenue enhancement, cost reduction, lower taxes, and lower cost of capital.” (Ross, 2005) SAI will use these ideas to achieve growth expansion without a merger or acquisition. Internal Investment Strategies SAI’s internal investment strategies were looked at to determine if the project undertakes will be greater than the financial assets of the comparable risk by looking at the risk of expanding market share of digital imaging versus entering the wireless communication market...
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When working through the scenario with a discount on the cash flow the wireless communications project had a NPV of 14,026 and the digital imaging had a NPV of $5,448 showing an internal rate of return of 32.00 for wireless communication and 23.40 for digital imaging. After the analysis of whether to use an outside vendor or stay in-house the NPV increased to $14,429 for wireless and $5,890 for digital with a small change in the IRR...
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