Finance and banking

Which of these motives are most important? In countries why we have people who don’t know how to speech English means that I will have plenty of clients and people willing to learn English. Since am sure this is not common business in such countries, am sure the market it’s there and the competition is less. Again, the motives for direct investment in foreign countries will take effect for my business. Definitely, I will have the advantage of natural resources like land and some tangible facilities which am sure you may be offered by academic institutions from the same countries with the aim of promoting English learning in their countries. Availability of both skilled and skilled labor can also contribute and help me stabilize the profits of my total business very quickly.

What factors affect the probability of these conditions occurring? (In other words, explain why the conditions could occur in one set of countries, but not another set of countries). Each country has its own different business regulations and rules. For example, tax regimes differ from one country to another and therefore this will occur and affect my business differently across different countries. Factors that can cause these conditions to happen include bad political climates and economic meltdown that can bring companies down. When political temperatures are high, then business will be in recession and this can affect cause inflations hence affecting returns. (Katrishen et al 1998) To enjoy economies of scale as well as I benefit from diversification, then I would ensure that the supplemental pamphlets and CDs are produced within the same premises that I offer the services and only the same staff that does the same task so that the two business activities run concurrently.

This will save me the cost of venue and the extra employees I may need to perform that and then I will be serving a big number of clients with less manpower and facilities g. How would you come to a decision on whether to pursue business expansion that capitalizes on economies of scale even if it would forgo diversification benefits? Do you think economies of scale would be more important or less important than diversification for your business? I will consider the nature of the market I have from a particular country. If most the clients I get are free to come for physical lessons and learn together in a closed class, then I will consider to capitalize economies of scale.

If most the people willing to learn English are busy always are willing to use the supplemental pamphlets and CDs to learn at their own time, then I will consider diversification. To do this thee are three items that are considered. These include the payback period, net present value and the internal rate of return. The management has to determine how long it will take for the business to pay back the initial investment that is invested into it. (Brooks et al 2013) Nevertheless, net present value is the most common used method and more effective. It uses discounted cash flows analysis. d. Explain how you would derive a required rate of return for your capital budgeting analysis. What type of information would you use to derive the required rate of return? Required rate of return will give you the amount of returns that an investor will expect in order to realize profits from a particular project.