Capital Investments in Emerging Markets

Capital Investments in Emerging Markets
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Capital Investments in Emerging Markets
Capital investment in emerging markets is one of the leading business ventures, especially for large investors such as investors in manufacturing companies. Some conventional approaches for assessing capital investments include cash payback, net present value, and internal return rate. Cash payback computes the time taken for a business to recover the initial investment cost according to cash inflows (Pergler & Rasmussen, 2014). On the other hand, the internal net of return strategy determines the net interest generated from the prospective investment by calculating the percent that will yield a discount on the business net annual cash flows until the net present value is zero. In this respect, a business must ensure that every new project or investment must yield a higher internal net return than the cost of its capital. Lastly, net present value and internal rate of return use a similar approach because they both discount their net cash flows to present values and compare the cost with the business's capital expenditure required for investment (Weygandt et al., 2016). This paper seeks to evaluate Samsung Company and its methods to complete the conventional methodologies for examining the capital investment in emergent markets.
Response 1:
In its developmental stages, Samsung dealt with various commodities, including but was not limited to fertilizers, wool, and sugar. The firm employs different tactics to supplement its conventional approaches to assessing potential opportunities for capital investments. This paper considers the company's reconnaissance/research method. Samsung.com (2019) notes that the company dispatches researchers to different markets in different countries worldwide to assess and determine the potential for investing in the country. The finding indicates that the demand for electronics and smartphones in developing countries is high (Weygandt et al., 2016). Additionally, research shows that the demand for tablets and cheaper electronic products is also higher in developing countries than their developed counterparts.
Based on the above findings, the company increases electronics, smartphones, and tablets to benefit these products in developing countries (Pergler & Rasmussen, 2014). On the contrary, the company slows the production of laptops and personal computers because of the low demand for these gadgets in developing countries compared to smartphones' need. Moreover, Samsung uses the methodology of evaluating capital investment to assess the potential for demand for a new product. For instance, Klein (2015) posits that the introduction of new technologies like the wearable Tec went through a series of feasibility tests and studies before launching them officially into the market.
The Rationale for the Methodology
The rationale for evaluating capital investment methodology helps the firm ensure that it only produces a new product to meet the demand in the world market. Additionally, the research studies help the company advance its innovation to suit the ground's actual needs (Samsung.com, 2019). For instance, the company's research ex...