Preview

Investment Appraisal Techniques for Advanced Manufacturing Technology

Powerful Essays
Open Document
Open Document
8754 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Investment Appraisal Techniques for Advanced Manufacturing Technology
Integrated Manufacturing Systems
Emerald Article: Investment appraisal techniques for advanced manufacturing technology (AMT): a literature review F.T.S. Chan, M.H. Chan, H. Lau, R.W.L. Ip

Article information:
To cite this document: F.T.S. Chan, M.H. Chan, H. Lau, R.W.L. Ip, (2001),"Investment appraisal techniques for advanced manufacturing technology (AMT): a literature review", Integrated Manufacturing Systems, Vol. 12 Iss: 1 pp. 35 - 47 Permanent link to this document: http://dx.doi.org/10.1108/09576060110361528 Downloaded on: 19-11-2012 References: This document contains references to 74 other documents Citations: This document has been cited by 5 other documents To copy this document: permissions@emeraldinsight.com This document has been downloaded 2686 times since 2005. *

Users who downloaded this Article also downloaded: *
Hui Chen, Miguel Baptista Nunes, Lihong Zhou, Guo Chao Peng, (2011),"Expanding the concept of requirements traceability: The role of electronic records management in gathering evidence of crucial communications and negotiations", Aslib Proceedings, Vol. 63 Iss: 2 pp. 168 - 187 http://dx.doi.org/10.1108/00012531111135646 Sandy Bond, (2011),"Barriers and drivers to green buildings in Australia and New Zealand", Journal of Property Investment & Finance, Vol. 29 Iss: 4 pp. 494 - 509 http://dx.doi.org/10.1108/14635781111150367 Charles Inskip, Andy MacFarlane, Pauline Rafferty, (2010),"Organising music for movies", Aslib Proceedings, Vol. 62 Iss: 4 pp. 489 - 501 http://dx.doi.org/10.1108/00012531011074726

Access to this document was granted through an Emerald subscription provided by Edinburgh Napier University For Authors: If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service. Information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Powerful Essays

    Concordia Real Estate Inc Case Study: Analysis of the Investment Opportunity
    • 3248 Words
    • 13 Pages

    Concordia Real Estate Inc Case Study: Analysis of the Investment Opportunity

    The results of the analysis lend favourably towards accepting the investment project. First it is important to note that based on the after tax cost of borrowing and a risk premium of 3.75%, a discount rate of 8.89% was deemed appropriate for the project. The majority of the investment indicators used to value the project use discounted cash flows to determine the investment’s profitability. This technique allows for comparison amongst different investment opportunities available, as it provides the total return that is expected to be achieved over the project’s horizon in current dollar terms.…

    • 3248 Words
    • 13 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Atlas Metal Company
    • 1487 Words
    • 6 Pages

    Atlas Metal Company

    The purpose of this report is to help a financial special assistant, Linda, to analyze the financial position of Atlas Metals Company and deciding its capital budgeting and capital structure. Firstly, I explain why firm should use Net Present Value (NPV) methods for capital budgeting rather than Return on Investment (ROI) method and Payback Period method. Secondly, I calculate the Weighted Average Cost of Capital (WACC) which will be used as discount rate while calculating NPV. Then, I decide which rapid prototyping system company should invest as well as I compare the each expansion projects’ IRR with WACC to decide which projects should be invested and which should not. After deciding projects which should be accepted, I draw Investment Opportunity Schedule (IOS) and Marginal Cost of Capital (MCC) graphs to decide where the company should finance accepted projects.…

    • 1487 Words
    • 6 Pages
    Powerful Essays
    Read More
  • Good Essays

    Nucor Memo
    • 905 Words
    • 4 Pages

    Nucor Memo

    Top management at Nucor Corporation has determined its own internal investment criterion in determining whether to accept or reject a new investment project. Currently, the company judges the potential success of a project by its ability to achieve a 25 percent return on assets after 5 years. This ratio measures how efficiently Nucor’s assets are able to generate revenue. Based off current market growth rate predictions, an investment in the CSP process will result in a return on assets of 29.33 percent. (Exhibit 1) This number exceeds the initial investment qualification by a promising margin of about 4 percent. Therefore, based on the internal criterion, this CSP process is a relatively safe and profitable investment.…

    • 905 Words
    • 4 Pages
    Good Essays
    Read More
  • Good Essays

    Paccar Build vs Buy
    • 655 Words
    • 3 Pages

    Paccar Build vs Buy

    To maintain prominent competence in heavy truck manufacturing industry, PACCAR needs to upgrade major lines to the most efficient and advanced technologies. There are two options to be considered: purchasing technologies from outside providers or developing the technologies within the company. As financial analysts, we evaluate the two options by calculating and analyzing NPV, payback, IRR, and MIRR for each alternative. Analysis indicates that developing the technologies is more optimal as it outperforms the alternative in all measures. Among all measurements, we believe NPV to be the most effective. The details of our analysis are documented below.…

    • 655 Words
    • 3 Pages
    Good Essays
    Read More
  • Good Essays

    Super Project HBS
    • 882 Words
    • 4 Pages

    Super Project HBS

    To analyze the attractiveness of the investment in the Super Project, we must use the estimated cash flows calculated to derive a decision based on a particular capital budgeting technique. Within this report we have considered the Accounting Rate of Return, the Payback Period, the Internal Rate of Return (IRR) and the Net Present Value (NPV) techniques. The accounting rate of return is defined as the average after-tax profit divided by the average invested capital. The average invested capital for the Super Project is simply the average of the $200,000.00 initially required and the Total Working Funds (line 20) for each period forecasted in Exhibit 6. The average after-tax profit is simply the average of the Net Profit (line 37) for each…

    • 882 Words
    • 4 Pages
    Good Essays
    Read More
  • Good Essays

    Net Present Value and Project
    • 3279 Words
    • 11 Pages

    Net Present Value and Project

    Through our analysis we found that the cost of capital of the project to be 13.487% and a Weighted Average Cost of Capital (WACC) to be at a value of 9.70%. Factoring in the WACC into our projections we found that if the demand maintains at an average rate the project will be at a positive Net Present Value of $5,997,505.31 with an IRR of 13.21%, a profitability index of 8.84, and an approximate payback period of 6.84 years. Please see Exhibits below for a snapshot of the capital budget and NPV values.…

    • 3279 Words
    • 11 Pages
    Good Essays
    Read More
  • Powerful Essays

    Star Appliance
    • 1789 Words
    • 8 Pages

    Star Appliance

    Star Appliance is looking to expand their product line and is considering three different projects: dishwashers, garbage disposals, and trash compactors. We want to determine which project would be worth doing by determining if they will add value to Star. Thus, the project(s) that will add the most value to Star Appliance will be worth pursuing. The current hurdle rate of 10% should be re-evaluated by finding the weighted average cost of capital (WACC). Then by forecasting the cash flows of each project and discounting them by the WACC to find the net present value, or by solving for the internal rate of return, we should be able to see which projects Star should undertake.…

    • 1789 Words
    • 8 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Lockerheed Tristar Case Study
    • 1593 Words
    • 7 Pages

    Lockerheed Tristar Case Study

    Professor Gupta, many organizations use financial methods to determine the viability of projects and decisions based in the initial required investment. The financial industry has many standards regarding these methods, with the most commonly used being Internal Rate of Return (IRR) and Net Present Value (NPV). Each method encompasses positives and negatives; however if either are used without fully understanding what their prospective results reveal, mistakes can be made and under-estimations of return will happen. In a recent case Lockheed Martin chose to use the Internal Rate of Return to value their Tri Star project. We have determined this to be a mistake and, through this case analysis, will show where the mistake happened. We also intend to explain how using the Net Present Value method will uncover a different, more realistic picture of the project’s return.…

    • 1593 Words
    • 7 Pages
    Powerful Essays
    Read More
  • Better Essays

    Hansson Private Label Case Study
    • 2302 Words
    • 7 Pages

    Hansson Private Label Case Study

    This project is to identify and analyze HPL (Hansson Private Label ) company’s new investment decisions based on a series of calculations include: Operating Cash Flows (OCF), Net Present Value (NPV), Internal Rate of Return (IRR), and Sensitivity Analysis. The analysis suggests that Hansson should be very cautious regarding the investment proposal that is developed by his manufacturing team. Although the projections and analysis of the project for the next 10 years proposed by Robert Gates seems reasonable and will generate positive NPV and an IRR greater than the discount rate, NPV is very sensitive with regard to unit volume and unit selling price changes. A decrease in the projected unit volume and selling price might produce a negative NPV.…

    • 2302 Words
    • 7 Pages
    Better Essays
    Read More
  • Good Essays

    Enager Industries
    • 1974 Words
    • 8 Pages

    Enager Industries

    Enager Industries, Inc. was a relatively young company whom manufactured and produced products/services within three divisions- Consumer Products, Industrial Products and Professional Services. Consumer Products, the oldest among the three divisions in Enager, designed, manufactured and marketed a line of houseware items. Industrial Products built one –of –a– kind machine tools to customer specifications. Professional Services, the newest among the three, provided several kinds of engineering services and this division had grown rapidly because of its capability to perform “environmental impact” studies . At the urging of CFO Henry Hubbard, Enager’s President, Carl Randall, had decided to begin treating each division as an investment center, so as to be able to relate each division’s profit to the assets the division used to generate it profits. However, several issues arose regarding this performance evaluation method and other management control choices. First of all, profitable new project at Consumer Products Division, whose return was 13% calculated from Exhibit 3, could not get approved from upper management because it could not reach the pre-determined universal target return of at least 15 percent, even if all the divisions had completely different line of business. This could potentially discourage product development managers’ incentive to engage in new projects. More importantly, the company could miss out the opportunity on new products in the long-run, although it might not have a large return right away in the short-run.…

    • 1974 Words
    • 8 Pages
    Good Essays
    Read More
  • Best Essays

    A Brief Review of Marketing Accountability, and a Research Agenda
    • 8510 Words
    • 35 Pages

    A Brief Review of Marketing Accountability, and a Research Agenda

    Access to this document was granted through an Emerald subscription provided by Edinburgh Napier University…

    • 8510 Words
    • 35 Pages
    Best Essays
    Read More
  • Powerful Essays

    Return on Investment
    • 1457 Words
    • 5 Pages

    Return on Investment

    Return on Investment (ROI): An examination of ROI financial analysis and its historical roots with the DuPont Company…

    • 1457 Words
    • 5 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Lean Operation -Toyota Case Study
    • 2282 Words
    • 10 Pages

    Lean Operation -Toyota Case Study

    One of the most important things in a manufacturing company in order to obtain profit is to have a high level of quality and a minimum level of investment. This is the key that every company wanted to find during the years. In order to maintain a high position on the market and a competitive advantage, the implementation of a manufacturing strategy is very important.…

    • 2282 Words
    • 10 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Dissertation on Retention
    • 8233 Words
    • 33 Pages

    Dissertation on Retention

    Access to this document was granted through an Emerald subscription provided by ROBERT GORDON UNIVERSITY For Authors: If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service. Information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.com With over forty years ' experience, Emerald Group Publishing is a leading independent publisher of global research with impact in business, society, public policy and…

    • 8233 Words
    • 33 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    International Journal of Retail & Distribution Management
    • 5431 Words
    • 22 Pages

    International Journal of Retail & Distribution Management

    Access to this document was granted through an Emerald subscription provided by ASTON UNIVERSITY For Authors: If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service. Information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.com With over forty years '…

    • 5431 Words
    • 22 Pages
    Powerful Essays
    Read More

Related Topics