Imagine you have K 6.5 million at your disposal to invest in your various options of investments. However, you have no indication on how to effectively go about it and accordingly make a quality decision, but you have some indistinct ideas. One option available to you is to build a block of flats or invest this lump sum in undisclosed type of investments. You are also privy to the fact that building flats will yield the same returns if you invested in these other unrevealed investment options available over same life span [you will need to mention them in (d)]. Assuming in the economy you are domiciled in, the prevailing interest rates are pegged at 35 percent and to complete a block of flats it will take you 3 years, of which inflation is at 25 percent. Further you should note that other factors of investment are only varied in long run to increase your available lump sum of investment, which may be constrained by the rising inflation as time rolls on. 1. From your calculations and knowledge of managerial principles, mention the type of instruments of investment you would have used here to invest your money, other than building flats, if you had adequately evaluated your investment options? 2 Based on your computations and comparisons which investment option is more technically viable and appealing, further state the managerial principle you would apply to make effective and quality decision for this, based on time horizon, give reasons for your answer?

Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
Publisher:William Nickels
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
icon
Related questions
Question

Imagine you have K 6.5 million at your disposal to invest in your various options of investments. However, you have no indication on how to effectively go about it and accordingly make a quality decision, but you have some indistinct ideas. One option available to you is to build a block of flats or invest this lump sum in undisclosed type of investments. You are also privy to the fact that building flats will yield the same returns if you invested in these other unrevealed investment options available over same life span [you will need to mention them in (d)].

 

Assuming in the economy you are domiciled in, the prevailing interest rates are pegged at 35 percent and to complete a block of flats it will take you 3 years, of which inflation is at 25 percent. Further you should note that other factors of investment are only varied in long run to increase your available lump sum of investment, which may be constrained by the rising inflation as time rolls on.

1. From your calculations and knowledge of managerial principles, mention the type of instruments of investment you would have used here to invest your money, other than building flats, if you had adequately evaluated your investment options?

 

2 Based on your computations and comparisons which investment option is more technically viable and appealing, further state the managerial principle you would apply to make effective and quality decision for this, based on time horizon, give reasons for your answer?

   

 

Expert Solution
Step 1

Disclosed Investment

In the monetary world, revelation alludes to the ideal arrival of all data about an organization that might impact a financial backer's choice. It uncovers both positive and negative news, information, and functional subtleties that sway its business. 

In the investing generation, organizations issue revelations to furnish financial backers and venture examiners with data that could impact a financial backer's choice of whether to purchase an organization's stock or bonds. The revelation explanation can uncover negative or positive news and monetary data about the organization. 

Speculation research reports likewise uncover the idea of the connection between the value examiners, their manager, for example, the venture company, and the organization that is the subject of the examination report–called the subject organization. It additionally gives basic realities that financial backers ought to know about, like warning statements.

Undisclosed Investment

Every property has an undisclosed Reserve Price, this is the base sum that you concur that you will acknowledge for your property. Just the Start Bid and any offers got are apparent as the Reserve Price stays classified. 

Any organizer will let you know that fund-raising is typically hard, truly hard. But doing as such not just gives a startup the capital it needs to develop, yet for beginning phase organizations particularly, it additionally goes about as some kind of market approval where barely any different signs exist. However, imagine a scenario where the size of the raise pales into inconsequentiality when contrasted with a startup's rivals. That doesn't make for a decent story. 

The absolute most normal justification behind a speculation sum staying undisclosed is that the size of the round would be seen by the market as derisory in contrast with contenders. 

steps

Step by step

Solved in 2 steps

Blurred answer
Similar questions
Recommended textbooks for you
Understanding Business
Understanding Business
Management
ISBN:
9781259929434
Author:
William Nickels
Publisher:
McGraw-Hill Education
Management (14th Edition)
Management (14th Edition)
Management
ISBN:
9780134527604
Author:
Stephen P. Robbins, Mary A. Coulter
Publisher:
PEARSON
Spreadsheet Modeling & Decision Analysis: A Pract…
Spreadsheet Modeling & Decision Analysis: A Pract…
Management
ISBN:
9781305947412
Author:
Cliff Ragsdale
Publisher:
Cengage Learning
Management Information Systems: Managing The Digi…
Management Information Systems: Managing The Digi…
Management
ISBN:
9780135191798
Author:
Kenneth C. Laudon, Jane P. Laudon
Publisher:
PEARSON
Business Essentials (12th Edition) (What's New in…
Business Essentials (12th Edition) (What's New in…
Management
ISBN:
9780134728391
Author:
Ronald J. Ebert, Ricky W. Griffin
Publisher:
PEARSON
Fundamentals of Management (10th Edition)
Fundamentals of Management (10th Edition)
Management
ISBN:
9780134237473
Author:
Stephen P. Robbins, Mary A. Coulter, David A. De Cenzo
Publisher:
PEARSON