Mba 540 Analysis On Investment Decision For Silicon Arts, Inc. Sai

854 words - 3 pages

Silicon Arts, Inc. (SAI) is a four year old company which manufacturer's digital imaging integrated Circuits which are used within digital cameras, DVD players, computers, and medical and scientific instruments. Hal Eichner, SAI's Chairman, has a two-point strategic agenda that he wants to enact. One of his agendas is for the company to increase market share and the other is to keep up with current technology. As the Financial Analyst for SAI, one of the duties that need to be performed is to analyze two mutually exclusive capital investment proposals. The two options SAI is facing are to expand within the existing Digital Imaging market share or to enter into the Wireless Communication market.Digital Imaging AnalysisIn analyzing the first of the two proposals, the option would be to increase the existing Digital Imaging semiconductor market share. The tempting aspect of the project is that there is an estimated product market increase of 20% in the first year plus a 7% increase every year there after for five years. SAI currently owns 18% of the current semiconductor market. By increasing its production output for the first year to 400,000 chips, SAI can tap into this projected market growth. If the numbers can be justified, this would mean that SAI would increase its market share by 3.6% which turns out to be 20% of 18% in the first year. In 2-5 years this ratio turns is expected to increase market share by 1.26% which turns out to be 7% of 18%. The overall projected increase in revenues is 30% or $54 million in year one. To boost production, SAI will have to set up an addition plant in California and spend cash of $40 Million as an investment. Increased revenues can now be adjusted at $14 million, with regards to the $54 Million in cash and $40 Million in investment for the first year. The plant maximum output is expected to be 10,000 units per day. Common sense will dictate that that someone has over-estimated the space and machinery needed for such a project. There is roughly 261 working days in one year. This means that the plant would be capable of producing 2,610,000 chips in one year excluding weekends.Wireless Communication AnalysisIn analyzing the Wireless Communication proposal, this approach would have SAI venture into the wireless market. The lifespan of this project is approximately seven years. The company will have to sell chips for data enabled mobile phones and is currently testing the prototype chip with positive results, so far. SAI...

Find Another Essay On MBA 540 Analysis on Investment Decision for Silicon Arts, Inc. SAI

Return on Investment Analysis

1233 words - 5 pages Return on Investment Analysis Profit Every business must devise a means to make and measure the profit from an investment. Profit reflects the very nature of business. Businesses that provide a product or service want to know if their efforts in a particular field will result in financial gain (Wiens 1997). The concept "Return On Investment" provides a means to measure the profit obtained from an investment. I will discuss the area

Risk Analysis on Investments Decision

1589 words - 6 pages higher Net Present Value (NPV), which is the difference between the project's value and the cost. This paper will discuss capital budgeting for Silicon Arts, Inc (SAI) and the inherent risks associated with the investment decision-making. Additionally, valuation techniques for the internal and external investment strategies will be discussed.Capital BudgetingThe financial analyst at SAI was provided with two capital investment proposals that

Strategic Analysis on Motorola Inc..

8490 words - 34 pages Aspects 17Marketing Aspects 18REFERENCES 20I. Background Development"Motorola: a Final Stage Corporation introducing an Initial Stage product innovation with the Mobile Extreme Convergence (MXC) architecture for mobile technology."The company that I chose to complete my Strategic Analysis on is Motorola Inc.. Many of us are familiar with Motorola products due to the advent of the cellular phones. Regardless of the carrier of the service, be it

Security for Information Technology: Return on Investment

620 words - 2 pages Return on Investment (ROI) is a common issue among corporate management. The question can seldom be answered to everyone's satisfaction. It is especially harder to answer in the information security context where a lack of data makes it difficult to quantify what exactly security spending earns.The management knows the threat is there but they do not feel the threat. In other words, they cannot justify the spending as they do not have a clear

Using Decision Analysis for Environmental Decisions

1422 words - 6 pages environmental problems. It is also intended to avoid monetizing the criteria being used to make the decision. It is difficult to set a monetary value on many environmental criteria due to the lack of a defined scale to measure the value of a park or an endangered animal for example. Traditional decision analysis in an environmental problem doesn’t take into consideration the “stakeholders” who is anyone who may be affected by the outcome of

Investment Appraisal techniques required for proposed investment on the new digital photograhic printer.

3028 words - 12 pages follows;Analysis and interpretation 65%Integration of academic literature 35%No. 1 New Market Road,HULLYorkshireHU2 9BQ11th December 2006Attention: Managing Director From: Financial AssistantRE: Suggested techniques required for the proposed investment on the new digital photographic printer.In reference to the meeting held on the 6th of November 2006, I have provided you with information below on the investment appraisal techniques and sources of

Analysis of a PHD Student´s Research on Investment Inequality

1515 words - 6 pages that investment plays a meaningful role in the overall income inequality during financial bubbles, and even in economic downwards, proving the third hypothesis. Research Methods: The Federal Reserve Board’s Survey of Consumer Finances (SCF) was the study used on this article for its main analysis. This survey dates from the 1992 to 2010, and includes the information of household income, wealth holding, and other financial topics. In addition, the

MGT 350: Tools and techniques for Decision Analysis

1109 words - 4 pages poor job of understanding the probabilities of consequences" (Tools for decision analysis, 2006).Probabilistic modeling is primarily based on the application of statistics for assessing the probability of uncontrolled events and also as risk assessment of the decision. Difficulties in probability assessment arise from scarce, vague, inconsistent, or incomplete information. Even decision-makers that know statistics tend to rely more on personal

FIN 325 - Financial Analysis for Managers II-Capital Budgeting Decision-Making Tools.

2638 words - 11 pages organization takes in investing in a capital budget project. However, investors, and decision makers should be confident that the risks out balance the benefits.Capital Rationing is the limit set on the amount of funds available for investment imposed by management. The process of placing a budget constraint on projects a firm can accept is referred to as 'Soft Rationing'; this means only projects that fall within the budget constraint can be accepted

Using the theory of consumer behavior, conduct critical analysis on the decision making process

3791 words - 15 pages initiator for purchasing a new motor.2. 2. 2 The roles in the stage of information searchOnce the problem has been recognized, an information search is undertaken to isolate an effective solution (Neal, Quester & Hawkins, 1999, p1.17). Information gather will play significant role in this stage of decision process. Several authors defined the individual who has expertise on and interest in a particular purchase is information gatherer (Neal

Using Forecasting, Regression and Decision Making Analysis for Wal-Mart Opening New Department in St. Catharines, Canada

3216 words - 13 pages decision model, they have to develop new strategy for introducing farm fresh.We have applied various models like decision analysis, regression and forecasting. Based on application, we recommend that Wal-Mart will make good profits and would be able to attract customers if it introduces new division of farm fresh at St Catharines.INTRODUCTIONWal-Mart"BUY IT LOW, STACK IT HIGH, SELL IT CHEAP"COMPANY PROFILEUSP: Everyday low price, Rollbacks Wal

Similar Essays

Risk Analysis On Investment Decision Silicon Arts, Inc

1039 words - 4 pages Silicon Arts, Inc. (SAI) is a four year old company which manufacturers digital imaging integrated Circuits which are used within digital cameras, DVD players, computers, and medical and scientific instruments. Hal Eichner, SAI's Chairman, has a two-point agenda for the company to increase market share and keep pace with technology. As the Financial Analyst for SAI, one of the duties performed is to analyze the two mutually exclusive capital

Problem Solution: Lester Electronics, Inc Mba 540 Week 6

2593 words - 10 pages ; Acquisitions, (2007). Reference for Business. Research, 2007, Net Present Value. Retrieved on January 17, 2009 from:, (2004). Introduction to Corporate Finance. The McGraw-HillCompaines, Retrieved January 16, 2009 from University of Phoenix, rEsource, MBA/540 Maximizing

Risk Analysis On Investment Decision

840 words - 3 pages Risk Analysis PAGE 5 Running head: RISK ANALYSIS ON INVESTMENT DECISIONRisk Analysis on Investment DecisionKatrina WhiteUniversity of PhoenixMBA/540 - Maximizing Shareholder WealthNovember 10, 2008Oscar Lewis, InstructorRisk Analysis on Investment DecisionSilicon Arts Incorporated, a four-year old high tech firm with annual sales turnover of $180 million, has a two point agenda, which is to increase market share and keep pace with technology

Risk Analysis On Investment Decision

1097 words - 4 pages ’s Chairman, Hal Eichner, wants to invest in a project that will increased the company’s market share and keep ace with new technology (University of Phoenix Simulation, 2008). SAI has two different opportunities to maximize shareholders wealth.Silicon Arts, Incorporated (SAI) has to analyze whether it would give the company a competitive advantage to acquire W-Comm. The acquisition would be considered an external investment strategy