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Geo systems Technology Group report-英国论文代写范文

2017-04-28 | 来源:51due教员组 | 类别:Report代写范文

51due英国论文代写网精选report代写范文:“Geo systems Technology Group report”,本文主要讲述的是地理系统技术集团(Geo-Tech)代表参与地理信息系统(GIS)市场的知名公司之一。随着市场前景的回暖,Geo Tech的增长有所改善。

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Introduction

Geo systems Technology Group (Geo-Tech) represents one of the renowned companies that participates in the Geographic Information System (GIS) market. With promising returns in its markets, Geo Tech witnessed improvement in its growth.


Executive Summary 

To establish the profitability and sustainability of the proposed business venture in Canada, the company is using the exchange rates and the operational costs as the key parameters for the decision-making process. Geo systems Technology Group (Geo-Tech) represents one of the renowned companies that participates in the Geographic Information System (GIS) market. With promising returns in its markets, Geo Tech witnessed improvement in its growth. Like all other businesses, the company is faced with competition from other firms that would provide the same products in other markets. Accordingly, the company started considering whether to enter the Canadian market where such systems had not been already established. In other words, Geo Tech key decision was to establish whether entering the Canadian market will be a profitable and sustainable business venture.  While these parameters are relevant for the decision-making process, the company should also use the model of net present value as this will give insights into the possible profitability issues that the company may face.  


Analysis

The growth of Timberland industry in Canada is on the rise. This implies that Timberland could purvey the services to the Timberland site in Canada remotely. Nevertheless, the limitations of the US Patriot Act is making the Timberland site reconsider the role of being a supplier in Canada. Accordingly, Geo-Tech is mulling on the idea of investing in Canada so as to capitalize on the market share provided by the Timberland industry. Geo-Tech also believes that the owners of Timberland can develop positive perceptions regarding the US sites after they have had experience with Geo-Tech Canadian sites. With the help of one of the employees, Thomas Boyatt has collected data related to investment in the Canadian market. The financial analysis includes working capital requirements, the number of contracts available, exchange rate risks present in the investment, life of the project, and initial investment. According to Boyatt, the main concerns are the exchange risks and the potential number of contracts in the business. Because Geo-Tech will be operating from the US, it implies that the outflow and inflow of the Canadian dollar will become necessary for the operations of the Canadian market to remain functional. Subsequently, the company will have to undertake the financing of the investment in Canada. The main risk with this approach is that the company will be faced with risks in exchange rates. While the exchange rates of the company have been established by the assistant of Boyatt, such estimations are mostly opinionated. This means that they may not be a true reflection of what takes place in the business environment as expected. Put another way, the subjective nature of the estimates makes them highly inappropriate for the current analysis.  In addition, the project cashflows are inclined to take place at separate times of the year although they are reflected in the analysis as taking place at the end of the year so as to make the projects e easily discernible. 


Financial Analysis and Recommendations 

In the present analysis, the net present value (NPV) model has been adopted. Using the NPV model, the projected net cash flows are established and then the risk-adjusted cost of capital is used to discount the risks that are associated with the investment. Based on the Canadian investment analysis, the results in net present positive value is estimated to be $83,317. From the NPV model, selecting the project will mean adding $83,317. The limitation of the NPV value as is presented in the case is that it embodies many assumptions regarding various aspects such as exchange and inflation rates. This means that the NPV model results may not be a true reflection of the returns that can be generated from the investment. 

Residual value of equipment 

From the figures presented, the assumption is that the residual value will be zero at the end of the five years. In line, it is projected that the equipment can be sold at CAD 100,000. The net present value will thus be $38,388 concerning exchange and tax adjustment rates. By incorporating the residual value, the implication is that the return on investments are likely to be increased further. In this regard, the investment remains to be worthy of undertaking. 

Effect of inflation 

The cash flows related to the project are expected to take place within the 5 year period. This means that he cash flows will be subjected to inflation. Taking this aspect into account, the variable cost which is also susceptible to inflation will be $22,081. As a result, the NPV of the project will reduce to $ 61,237. Although the NPV value is reduced, it remains to be positive, and thus, the project still has potential returns.

Purchasing power parity 

There will be exchange risks to be faced by the company when it converts the Canadian dollars inflows and outflows. In this regard, the estimations of the forward exchange rates are within the acceptable levels. The purchasing power parity rates will likely to increase the NPV value by $20,676. In addition, the purchasing power parity also suggests that investing in Canada will help Geo-Tech improves its financial base by a bigger margin. This, in turn, will improve the profitability of the company. From the purchasing power parity, it also makes sense that the investment will generate quick returns and cover for the possible inflation and exchange risks that are likely to be faced in the market once the company establishes itself in Canada. 

Conclusion 

From the results of the NPV analysis, Geo-Tech investment plan in Canada can be said to be viable. Three observations underpin this viewpoint. First, the NPV value after the five years period of investment is large enough at $83,317. This means that the company is guaranteed by making profits if it invests in Canada although there are potential challenges.  Second, the residual value of equipment also means that there would be additional sources of revenue should the company proceeds to invest in Canada. This can be seen from the fact that the residual value of equipment will add extra $38,388 to the current estimated NPV. Lastly, while the inflation and exchange rates elements are likely to reduce the NPV value to $61,237, the fact that the figure remains to be positive means that the investment will maintain to be worthwhile. Therefore, the company should continue with the plan to invest in Canada. Overall, Geo-Tech will reap significant returns as demonstrated by the NPV values and, therefore, the company can consider investing in the project.


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