Investment decisions

SCS – L3 – Q15 – Environment analysis

Analyze the general environment of Beta Pure Water Ltd using PESTEL framework.

Question

(a)Assess the general environment in which Beta Pure Water Ltd operates

(b) Analyse the nature of competition faced by Beta Pure Water Ltd. (c) Advise management on the best option between lease or buy. Support your advice with relevant calculations. (d)Explain TWO other factors you will consider in reaching your conclusion in (c) above.

Answer

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Tags: Beta Pure Water, Capital Investment, Depreciation, Investment decisions, Lease vs Buy, NPV, Tax Savings
Level: Level 3

Topic: Investment decisions

FM – L2 – Q25 – Portfolio theory and the capital asset pricing model (CAPM)

Calculate expected return and risk for two projects and advise on investment choice based on risk-return tradeoff.

Question

Regal Enterprises Ltd. has a mixture of investment portfolios, Project 3 and Project 4. The historical performance return on the projects are as follows:

	Return	Probability
Project 3	6.0	0.6
	1.0	0.4
Project 4	8.0	0.5
	-1.0	0.5

Required:
(a) Calculate the expected return and standard deviation for Project 3 and Project 4. (6 marks)
(b) The divisional manager will invest in projects that are more risky if they offer a higher return. Advise which project the manager will invest in, considering the expected returns of Project 1 (3.6) and Project 2 (3.95).

Answer

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Tags: CAPM, expected return, Investment decisions, Portfolio theory, risk analysis, Standard deviation
Level: Level 2

Topic: Portfolio theory and the capital asset pricing model (CAPM)

FM – L2 – Q11 – Economic and regulatory environment

Explain five areas where government action impacts financial management decisions.

Question

The economic environment within which the financial manager must operate is subject to a variety of influences, a major one is from the government.

Required:

Explain FIVE areas in which government action might affect the problem solving and decision making roles of a Finance Manager.

Answer

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Tags: Credit controls, Economic policy, Exchange controls, Financial management, Government influence, Investment decisions, Taxation
Level: Level 2

Topic: Economic and regulatory environment

Tag (SQ): Investment decisions

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SCS – L3 – Q15 – Environment analysis

Analyze the general environment of Beta Pure Water Ltd using PESTEL framework.

FM – L2 – Q25 – Portfolio theory and the capital asset pricing model (CAPM)

Calculate expected return and risk for two projects and advise on investment choice based on risk-return tradeoff.

FM – L2 – Q11 – Economic and regulatory environment

Explain five areas where government action impacts financial management decisions.

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Tag (SQ): Investment decisions

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SCS – L3 – Q15 – Environment analysis

Analyze the general environment of Beta Pure Water Ltd using PESTEL framework.

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FM – L2 – Q25 – Portfolio theory and the capital asset pricing model (CAPM)

Calculate expected return and risk for two projects and advise on investment choice based on risk-return tradeoff.

You're reporting an error for "FM – L2 – Q25 – Portfolio theory and the capital asset pricing model (CAPM)"

FM – L2 – Q11 – Economic and regulatory environment

Explain five areas where government action impacts financial management decisions.

You're reporting an error for "FM – L2 – Q11 – Economic and regulatory environment"

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