Investment Appraisal Under Uncertainty
Investment Appraisal under Uncertainty
Question a Internal Memo
Date: November 15, 2012
Subject: Investment report
To: Mr. Michael the Chief Engineer Mr. Richard the accountant Mrs. Rachel the economist
From: Alex the Managing Director
Hello, everyone, I would like to present an introduction and brief description of the investment project to you, and wish to make sense as much as possible. To begin with, this project is about creating an online-based business that specializes on consumer goods such as fashion garments, imported electronic products and food, nutrient products and many others like that. Generally speaking, all kinds of products have to be easily stored, delivered and legally accepted by both Hong Kong and China mainland government. Probably, some of you may wonder why we need to enter an online market for consumers, since there are too many players already and the profitability rate might be squeezed out by those first movers. Apart from, you may think that we have US$ 5,000,000,which could either create a unique business or enable to enter some business areas with large amount of initial capital requirement but higher profitability guarantee.
In response, I would like to explain the reasons why this investment project could be a good business opportunity for us, and the predicted net cash flows would be substantially and sustainability. In the first place, it is necessary to emphasize that we aim to construct a solid electronic business platform that base in Hong Kong but primarily focuses on China mainland market. More importantly, we might need to invest a substantial number of money on supply chain management, marketing, channel constructions and our own logistic networks. There are so many reasons to support why we have to focus on China mainland consumer goods market, not only the second largest economy in the world or the two digits or highly one digit
Question a Internal Memo
Date: November 15, 2012
Subject: Investment report
To: Mr. Michael the Chief Engineer Mr. Richard the accountant Mrs. Rachel the economist
From: Alex the Managing Director
Hello, everyone, I would like to present an introduction and brief description of the investment project to you, and wish to make sense as much as possible. To begin with, this project is about creating an online-based business that specializes on consumer goods such as fashion garments, imported electronic products and food, nutrient products and many others like that. Generally speaking, all kinds of products have to be easily stored, delivered and legally accepted by both Hong Kong and China mainland government. Probably, some of you may wonder why we need to enter an online market for consumers, since there are too many players already and the profitability rate might be squeezed out by those first movers. Apart from, you may think that we have US$ 5,000,000,which could either create a unique business or enable to enter some business areas with large amount of initial capital requirement but higher profitability guarantee.
In response, I would like to explain the reasons why this investment project could be a good business opportunity for us, and the predicted net cash flows would be substantially and sustainability. In the first place, it is necessary to emphasize that we aim to construct a solid electronic business platform that base in Hong Kong but primarily focuses on China mainland market. More importantly, we might need to invest a substantial number of money on supply chain management, marketing, channel constructions and our own logistic networks. There are so many reasons to support why we have to focus on China mainland consumer goods market, not only the second largest economy in the world or the two digits or highly one digit
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