Capital Investment Procedures for FEMYSO
Date: 2008-06-05Level: Bachelor Thesis in Business Administration EF0703, 15 ECTS Credits.Authors: Longinus Duru (Stockholm), Francis O.Oluduro (Västerås) and Mofid Al Jaafar (Västerås)Title: Capital Investment Procedures for FEMYSOProblem Area: Undertaking an investment by FEMYSO involves weighing up the riskagainst the returns but still capital investment decision are still one of the most undertakendecisions by organization managers because it involves commitment of huge amount ofmoney, which will affect the business over time. FEMYSO is embarking on a capital projectat the hearts of Brussels but there is still a problem associated with the profitability of suchventure.Purpose: The purpose of this study is to provide Capital Investment guidelines andprocedures for FEMYSO and to show how it can maximize profit through decision-making.Furthermore show the role of risk and interest rate in the investment.Methodology/Design/Approach: This paper used theoretical framework of existinginvestment theories to assess investment opportunity for FEMYSO and other organizations.The role of Mintzberg et al. Rational model of decision-making in investments was analyzed.This research paper went further to provide deeper insights into capital investment process byevaluating the net present value of an investment and determining the risk associated withinvestments.Research Limitation/Implications: This study is limited to FEMYSO and other nonprofitorganizations that want to assess Capital Investment Projects.Conclusion and Result: The more you wait to earn a dollar, the more heavily youdiscount for it because of the time value of money. Good management decision in FEMYSOand other related organizations will lead to profit maximization. The time value of moneyproblem can be solved by heavily discounting for the present value. Profitability of capitalprojects will depend on the future interest rate, which is uncertain and subject to risk.
Source Type:Master's Thesis
Keywords:femyso – forum of european muslim youth and student organization net
Date of Publication:06/19/2008