Premium Essay

Economic Factors

In: Business and Management

Submitted By sichaba
Words 5817
Pages 24
Factors Affecting Investment Decision
A multitude of factors influence the investing agencies decision in the choice of projects the amount of initial investment itself in influenced by the choice of location. For instant, the central government of India in consultation with the respective state government has declared certain areas, districts and taluses backward and has given a subsidy of 15 per cent on the cost of land buildings, to encourage balanced growth of industries, Another significant factor is the service rendered by state governmental agencies in providing infrastructural facilities, managerial expertise, loans, technical assistance, etc. Third, the cost of capital is a very important factor in the investment decision. While considering the cost of capital. Due card should be given to factors such as the opportunity cost. The entrepreneur, who is investing capital, is obviously interested in setting a return within a planned time horizon. For this purpose he has to consider the gestation period of the project, projected cash flow, taking into account factors such a inflation, governmental taxes, risk involved in investment, raw material prices, competitions, growth rate, trend, of wages, market demand, operating costs, fixed costs, development rebate estimated life or physical facilities, availability of build raw materials, cost of skilled labor, etc. Two other crucial factors which are estimated on the basis of particular state, and industrial relations climate. The investor will thus have to make economic analysis, technical analysis, market analysis, commercial analysis and financial analysis for undertaking investment decisions.
Basic Factors of Economic Decision Making thumbnail Economic decisions are geared to monetary payoffs. Businesses make economic decisions everyday. Entrepreneurs have to make decisions on how to run their business so as…...

Similar Documents

Premium Essay

Economic Factors

...Economic Factors When people hear the word “microeconomics” they may automatically think of unemployment, the housing market, taxes and income. These thoughts are correct. Microeconomics is the study of growth between people and their resources. Economics studies land, income, labor, taxes, investments and government expenditures. Mostly, economics measures the behavior of industries, the government and countries as a whole. The study of economics will determine connections between employment and spending as well as the growth of the economy. There are many factors that can affect the economy. These factors may include: the unemployment rate, inflation rate, interest rate and gross domestic product. , The gross domestic product is the total market value of goods and services produced in the economy over a year. The gross domestic product is one of the primary indicators used to measure the health of the economy. Economists rely on the comparison of the gross domestic product from year to year to determine if the economy has grown. The real gross domestic product is the total market value of goods and services, stated in prices over a year. The real gross domestic product provides more accurate numbers. The nominal gross domestic product is the gross domestic product where inflation has not been taken into account. Gross domestic product may appear higher than it really is if inflation is not accounted for. The unemployment rate is the number of......

Words: 694 - Pages: 3

Free Essay

Socio Economic Factors and Student Academic Performance

...assertion sociologist that education can be an instrument of cultural change which is being taught from home is relevant in this discuss. It is not out of place to imagine that parental socio–economic background can have possible effects on the academic achievement of children in school. Whatsoever affect the development environment of children would possibly affect their education or disposition to it. Parental status is one of such variables. When a woman's nutritional status improves, so too does the nutrition of her young children (Lisa et al, 2003). Rothestein has asserted as follows: "Parents of different occupation classes often have different styles of child rearing, different ways of disciplining their children and different ways of reacting to their children education needs. These differences do not express themselves consistently as expected in the case of every family; rather they influence the average tendencies of families for different occupational classes." (Rothestein, 2004). Socioeconomic status can be defined as a person’s overall social position to which attainments in both the social and economic domain contribute. (Ainley et al., 1995). When used in studies of secondary school students school achievement, it refers to the SES of the parents or family. Socio-economic status is determined by individual achievements in education; employment, occupational status; income and wealth. Several Parent may provide higher levels of psychological support for......

Words: 2221 - Pages: 9

Premium Essay

Economic Factors

...Economic Factors AIU Online Abstract Before writing a business plan for a new business it is important to research the type of industry this proposed business will enter. This paper will discuss two in particular which are an Oligopoly and a monopolistically competitive industry. Economic Factors Concentration Ratio (CR) is calculated using the total sales accounted for by the four largest firms in the industry. Industry A which has 20 firms and a Concentration Ratio (CR) of 30% is considered to be monopolistically competitive industry. This means there are many producers and consumer in the industry. The main characteristics of a monopolistic competition are; Ease of entry, many producers and consumers where no one business has total control over the market, and producers have some control over price. If the demand for the product rises and pushes up the price for the good, in the long run, new firms would come into the market. This would cause prices to come back down as competition increases and eventually there would be price equilibrium. Industry B has 20 firms and a Concentration Ratio (CR) of 80% is considered to be an Oligopoly. There are three main characteristics of an oligopoly. The first is that it is comprised of a small number of large firms. The second is identical or differentiated products which means while some oligopolies produce identical use of raw materials to make products used by other industries while others concentrate on products...

Words: 474 - Pages: 2

Premium Essay

Economic Factors

...Cultural and Economic Factors which has an influence on the Attachment Theory. Cultural: * As we all know that it is a universal and most natural process when a baby forms his/her attachment with its primary care giver most of the time it is the mother and often can be the father or other people within the family net work. * Attachment is perceived with variations in different parts of the world e.g. the west compared to the east and so on. * Different cultures have so many other ways that they form attachment with their little ones and it is different as what makes a secure attachment in their judgement and understanding. For example let me throw some light on the Dogan’s who are an ethnic group living in the central plateau region of Mali in Africa where the mother is the central attachment figure. She spends her maximum time with her infant along with also sleeps with her baby. Bearing this in mind the secure attachment formed was 87% categorized as secure attachment. Mother’s constant presence lessened the chances of the avoidance. * In the same way attachment can be broadly applied as not all secure attachments are the same.. For example secure Japanese children cry less often when leaving their mother’s arms than the secure German children. Yet both groups Japanese and the German children have the same secure attachment. Economical: Now I would like throw some light on the attachment disorders which are caused by the economic factors: * The......

Words: 514 - Pages: 3

Premium Essay

Economic Factors

...Economic Factors & Legal Concerns Introduction The current business environment is an ever-changing and dynamic environment where most business operates. There are a number of factors that can have an impact on the operation of a business. These items are legal factors which can be an important factor that should be kept in mind while a business conducts its business activities. Another will be that of economics and the associated factors, these are considered the most important factor in all other external factors that affect the operation of a company or organization and will be at all levels which will include the local levels, and the state and national levels as well (Conklin, 2006). The economy is always going to be a concern that could affect organizations effectiveness. It is important for management to consider economic factors and legal concerns in conducting business operations. The economic factors are described as the factors that affect the financial issues of the businesses to include labor, taxes, interest rates, etc. The business environment entails both internal and external factors. The external will be the ones that are beyond the control of the business itself. The internal factors will be items that can be controlled by the business. Economic policies of government, capital market and business cycle are an important part of the economic environment of a business. The legal environment will include the laws and rules that regulate......

Words: 1480 - Pages: 6

Free Essay

History A2 Crusades - Economic Factors

...This extract illustrates a clear example of economic and cultural motives from the first crusade, as the knights “motives were in part genuinely religious,” which then brings in the concept of holy war. In Pope Urban II’s speech in Clermont he had given a cultural motive of “whoever goes to liberate the church of God can substitute this journey for all penance,” this simply states, in return for fighting God’s enemies on earth, a person would receive a spiritual reward, which again supports the cultural motive from this extract. The economic benefits may include “possession of the land they re-conquered.” The historian also explores the contrast between the Byzantine Empire whom respect the Arabs due to similar cultures and way of life, to the ‘Turkish barbarians.’ Another brief point that is mentioned is the threat Muslims had on the Western Christians, as they “could not share the Byzantine’s tolerance and sense of security.” The main argument in this extract is that the motives for the first crusade were for economic and cultural motives. The historian briefly discusses “land-hunger.” The inducement of land and profit being held out in the account of Pope Urban’s speech and this broad principle must have motivated some crusaders. There were also economic motives from families, where the inheritance would go to the elder sons, which meant “younger sons had to seek their fortune elsewhere,” this is supported by historian Bryd who also believed this. However historians......

Words: 640 - Pages: 3

Premium Essay

Economic Factors Affecting Starbucks

...services, it also aim to build a closer connection with their customers through a “people to people” approach. By creating the Starbucks experience with the customers, it enables them to provide an even better service to attract and retain its customer’s loyalty. Economic/Global impact Coffee beans and coffee beverage is made up the main core business that Starbucks operates on, with coffee bean as the second highest valuable commodity in market, it means that any economic factors might affect the costing of the coffee beans, which might result in price hike for their beverages. External Opportunities and Threats Threats Currency Fluctuation. The U.S., being one of the world’s biggest economies was badly hit during the 2008 financial crisis; it had caused great shift and movement in other countries’ economy as well. Stock markets became bearish, raise in unemployment rates and the increase in the inflation rate had also further led to fluctuation of U.S. dollars against other major currencies. The U.S. dollars, which used to be one of the most sought after had ended up losing its competitive standing in the investment world. Unlike the U.S., developing countries such as China is currently going through rapid economic stimulus plan as laid down by their government. Reduced unemployment rate, increase in its gross domestic product had resulted in its country’s currency Yuan (CNY) to grow steady over the past few years. CNY is currently the stronger currency against......

Words: 1169 - Pages: 5

Free Essay

Transports- an Important Economic Factor

...regulamente precum şi luarea deciziilor pe baza votului prin majoritate calificată în Consiliul de Miniştri înlocuind unanimitatea.[5] Domeniul trasporturilor, care de altfel mă interesează în această lucrare, este unul din cele mai importante parţi componenete a ceea ce înseamna o piaţa unică, o uniune vamală între statele membre, politica europeană a trasporturilor fiind una din primele politici comunitare comune. Transporturile contribuie la realizarea a trei din cele patru libertăţi fundamentale pe Piaţa Unică, respectiv circulaţia liberă a persoanelor şi bunurilor, şi cea a circulatiei libere a serviciilor, pe care o consider necesară pentru realizarea unei politici de transport pan-european, în vederea sustinerii concurentei în plan economic pentru toti operatorii de transport din Uniunea Europeana. Prin semnarea Tratatului de la Roma din 1957 [6] care prevedea reguli si condiţii comune în ceea ce privea siguranţa sau posibilităţile de îmbunătăţire şi dezvoltare a transporturilor pe teritoriul ţărilor membre, s-a dorit deschiderea pieţelor, acest lucru fiind vital în rezolvarea problemelor sociale (siguranţa călătorilor, a mărfurilor) a problemelor economice ( politici de taxare), cu atât mai mult cu cat domeniul transporturilor asigura la nivelul Uniunii Europene 7% din PIB [7]. În 1985 se semnează Cartea Alba[8] privind finalizarea Pieţei Interne care stabilea o lista cu toate piedicile care stăteau in drumul Uniunii Europene către o piaţa unică şi......

Words: 2128 - Pages: 9

Free Essay

Economic Factors for Apple Inc in Usa

...Recent Political, legal and social factors Affecting Apple and Samsung Apple Political Factors: It is reported that more than a half of sales of their products come from countries other than America. Apple Inc manufactures a number of its parts and products from outside the US, like Czech Republic, Ireland, China, Korea and Cork. The bad political relations between US and the other world have bad outcomes for the company. Social Factors: Social Factors possessing these items are considered as status symbols in many societies which have also increased the sales of Apple Inc products. As the purchasing power of the common has risen in various markets across the world the purchasing of luxury products have gone up. As the world cannot be imagined without the gadgets, thus Apple products have marked their presence on the international market. Legal Factors: Apple Inc has been a participant in various legal proceedings and claims since it began operation. In October 2009, Nokia Corporation sued Apple for Apple's infringement of Nokia's patents relating to wireless technology Apple has been in a number of patent cases with players like HTC and Samsung. Samsung Political Factors: In most of the markets where Samsung operates, the political environment is favorable to its operations and though there are minor irritants in some of the foreign markets like India, overall Samsung can be said to be operating in markets where the political factors are kind. However, in......

Words: 1105 - Pages: 5

Premium Essay

Economic Factors

...ECONOMIC FACTORS THAT MAY RESTRICT THE AVAILABILITY OF NEW PRESCRIPTION DRUGS: Production and availability of new prescription drugs has been influenced by various economic factors which therefore is restricting and holding back new prescription drugs being developed and released to the public. Nearly all pharmaceuticals have an enormous research & development cost and relatively low marginal costs of production; therefore causing marginal cost pricing to not break-even. The high cost and low returns may not sound too attractive for some major firms however; many pharmaceuticals try their best to get a patent which means they can price their products above the marginal cost considering their competition would be weak. However this isn’t this simple, there are various procedures, costs and rules when obtaining a patent which reduces the amount of investment in research and development for new prescription drugs due to the uncertainty of returns and patent. The table to the left just shows how enormous the research and development costs are in contrast to other industries including computer services, oil and gas and chemicals. The table to the left just shows how enormous the research and development costs are in contrast to other industries including computer services, oil and gas and chemicals. (The 2009 EU industrial R&D scoreboard) The pharmaceutical industry is considered to be in the oligopoly market and is allocative and productively inefficient. At......

Words: 353 - Pages: 2

Premium Essay

Impacts on Transnational Corporation from Political and Economic Factors

...Discuss the political and economic effects of different types on transnational organizations. SAN3508 Aravinth Raj Palpandian 1 Introduction This essay has the topic of how political and economic factors of different types affect a transnational organization. It is a theory and concept based essay using frameworks from the course literature. The main body of our essay will contain answers to below queries:    What is globalization and how it gave rise to Global firms (stimuli). How Economic factor leads to certain advantages and attributes of Global firms / Transnational Corporations / Multi National Enterprises. How does country related political factors affect these firms and their policies. Then, we conclude our essay based on the finer details derived from our extensive discussion. Concepts and examples that are used to answer our queries in main body fall under the following topics:  Globalization and global firms.  Stimuli for becoming transnational: which in short is to prove that market-economy driven industries eventual step for growth is to go global.  Economic Attributes and Advantages.  Political factor and Conclusion. Globalization and Global Firms According to Hall (2011), a change has been occurring steadily over a span of last three decades where we have been moving away from a world in which national economies were a singularity and remained largely self-contained due to varying differences between them. We are working towards a...

Words: 2226 - Pages: 9

Free Essay

Economic Factors

...Economic Factor | Definition | Relevance to the UK | Positives and negatives | Inflation | * Inflation is when there is an overall rise in the price of goods across the economy. The CPI (Consumer Price Index) is the official measure of consumer prices. If it goes up then inflation is taking place | * In terms of the UK, inflation is occurring across the economy. General prices of things like bread, fuel and other every day products have increased in price. | * | Supply and Demand | * Supply- the amount of products available to customers * Demand- the amount of products the customers require | * Because of the way society has developed, the demand for everyday products and services only increase. Although there may be varying demands for different products and industries, in general the growing population demands an enormous volume of product. The supply at present is sufficient enough to meet demand, but with an increasing population and the amount of resources becoming less and less, we can imagine that the general demand will soon exceed the supply. | * | Stability of Government | When the government regularly monitors the economy with political authority over actions and affairs. | | | Recession | * A temporary depression in economic activity or prosperity. This happens when people stop spending money possibly due to inflation | * The uk is currently out of recession as people | * | Interest rates | These are set by banks to......

Words: 290 - Pages: 2

Premium Essay

Economic Factors Og Mnc

... ------------------------------------------------- ASSIGNMENT (GROUP) INTERNATIONAL MANAGEMENT (MGT-4030) GROUP MEMBERS NAME DANUSHAN KEISHIA ASHFAAQ DILKI SENURA NASHA FATHIMATH (1828) GROUP MEMBERS NAME DANUSHAN KEISHIA ASHFAAQ DILKI SENURA NASHA FATHIMATH (1828) CONTENTS INTRODUCTION ECONOMICAL FACTORS UNEMPLOYMENT RATE IN CHINA Unemployment Rate in China stayed unaltered at 4.05 percent in the final quarter of 2015 from 4.05 percent in the second from last quarter of 2015. Unemployment Rate in China arrived at the midpoint of 4.13 percent from 2002 until 2015, achieving an unsurpassed high of 4.30 percent in the final quarter of 2003 and a record low of 3.90 percent in the second from last quarter of 2002. UNEMPLOYMENT RATE IN ANGOLA Development and evenhanded improvement are obliged by the unfavorable business environment, lacking administration and straight forward in the administration of open assets, frail quality and upkeep of physical base, constrained nature of HR, feeble farming development, wasteful open administration conveyance to poor people, and troubles in overseeing salary from non-renewables to make investment funds for future eras. Social weights are expanding because of the high unemployment rate (26%), especially among youth; critical neediness, influencing 36.6% of the populace; and high wage imbalance. UNEMPLOYMENT RATE IN MEXICO Mexican jobless rate came in at 3.96 percent in December of 2015, the same as in the earlier month and the......

Words: 888 - Pages: 4

Premium Essay

Economic Factors and the Aviation Industry

...how the significance of economic factors can be seen to have influenced firms’ conduct and/or financial performance. Apply and reflect on economic ideas and theories. Demonstrate some specific examples of how economics can help us to understand the behaviour or well-being of firms as well as, if you wish, the limitation of economics. So that to end, you are being assessed less on coverage but more on application. How Economic Factors Affect the Aviation Industry Introduction The aviation industry is particularly susceptible to external economic factors because it affects and depends on a substantial number of industries. Also, because the industry involves operating between borders, then economic factors from other parts of the world other than the domestic market also affect it. Issues such as fiscal policies (both within and without the countries of destination), wage inequality and positive and negative externalities have a way of changing operations within this industry. How shifts and price elasticity of supply and demand affect the aviation industry Supply and demand price elasticity of airline carriers may vary depending on the nature of the industry. For new and emerging industries such as the Indian aviation sector, then price elasticity of demand and supply is near perfect. The number of transporters being added into their markets are largely affected by the nature of demand for the commodity the country underwent rapid economic growth in the late......

Words: 1778 - Pages: 8

Premium Essay

Economic Factors That Affect Apple in China and Usa

...Unit 1: Business Environment Assignment 3 Apple is the company that I am going to be talking about in this assignment; I will be talking about how different economic environments affect two countries Apple operates in (China, USA) and what countries they are manufactured and assembled in. They’re stores are usually located in the central main shopping centre of a city especially their stores in the UK. The company Apple is a private limited company and the company is open to the public to buy shares in the organisation. The company is based in the secondary sector of business. Here is a table stating some of the economic factors that may affect Apple. China United Kingdom GDP China GDP is worth 5879 billion dollars or 9.48% of the world economy, according to the World Bank. from 1960 until 2010, China's average GDP was 839.37 billion dollars reaching a massive rate 5878.63 billion dollars in December of 2010 and a record low of 46.46 billion dollars in December of 1962 The United Kingdom GDP is worth 2246 billion dollars or 3.62% of the world economy, according to the World Bank. From 1960 until 2010 the United Kingdom's average Gross Domestic Product was 862.04 billion dollars reaching 2810.97 billion dollars in 2010. Inflation The inflation rate in China was last reported at 4.1 percent in December of 2011. From 1994 until 2010, the average inflation rate in China was 4.25% reaching 27.70 percent in October of 1994 and a record low of -2.20% in March of 1999.......

Words: 1644 - Pages: 7