The Effectiveness of Investment in New Equipment under Inflation for a Welding Electrode Enterprise in Vietnam

• Main Authors: Hong Nhung Vo, 武紅蓉
• Other Authors: Lo, Chenchang
• Format: Others
• Language: en_US
• Published: 2013
• Online Access: http://ndltd.ncl.edu.tw/handle/00578599783589436079

碩士 === 義守大學 === 管理學院管理碩博士班 === 101 === Inflation and its adverse impacts on the economy are attacking Vietnamese enterprises at two-digit level at present. It not only pauperizes the integrity labors but also fastens the capital funds of enterprises. The demand to expand business operation or invest in new equipments becomes much more difficult, even to be survival. To encounter with the decline of economy, no less Vietnamese entrepreneurs misled to waste of their money for the rubbish technological machines imported from overseas. They did not help companies to save their money but were harmful to the environment and made their productivity reduced quickly. Clearly, the managers need the effective foreseeing tools to prepare their budget to be suit to the complex evolvement of market economy and wait in front of the possible risks in future. A Cash Budget model which contains the trends of changes in variables under the impact of inflation will help Vietnamese soldering sticks manufacturers, particularly the managers of Ha Viet welding electrodes joint stock Company to control operational capital sources and forecast on the necessary borrowings as well as the payments in the near future better. The stable capital sources in turn help the company not only to sustain passing the inflation periods well but also expand their plant with new investments. A financial analysis will access nearer to the current operation status of Ha Viet Company, and then decide the demand on capital for investing in new equipment and the methods to borrow. ANOVA F-test experiments give the company more alternative choices between different types of machines and outline the initial investment costs of project. Finally, Capital Budgeting methods will assist to check the effectiveness in long-term of the investment. The theories on relationship between normal interest rate, real interest rate and inflation rate such as the Fisher equation, the discount rate of Cash flows therefore are studied carefully to discuss, argue and give out the deep understanding and new perceptions. The limitations on real information, knowledge and remainder defectiveness of current Cash Budget model are waiting for future complements.