A new company wants2 embark a new project. What r the financial pros&cons which could be faced??
Answers:
The question is a little vague. However assuming that a diligence exercise has been undertaken, then I would run a financial model, testing various scenarios. Also, with projects, companies often do not adequately allow for the human resources required to run the project. As you know, people costs can be the most expensive part of a project. The other thing to consider is the role that technology can play in saving, time, cost, people etc.
U need 2 provide alot more details for any body 2 give u full & concise answer.
The Financial Pros: YOU MAKE MONEY.
The Financial Cons: YOU DON'T MAKE MONEY, OR YOU LOSE MONEY.
Any new project requires a Business Plan, an outline strategy and a Balance Sheet with projected revenue. If it comes out in the Red (negative cash flow, i.e. costs and expenses are higher than your gross sales or income) then you find the loopholes and reorganize your strategy or your plan until you can ink the financials in the Black (positive cash flow).
Basically, what would be the set-up and running costs, and would it be worth the outlay?
How long would it take to recoup the capital invested and what would the return be?
Is there even a demand for this new product/service and is anyone else doing it better or cheaper?
Do the staff already employed have the skills needed or would you need to pay for their re-training or fund a recruitment drive?
Are you going to need more from the project later on than when you initially set it up? It might be worth investing extra initially to get a better return later on. Or it could even cost you more to expand later on - i don't know what the project is so this is all just speculation.
The standard "questionnaire" for such a proposition is called a SWOT analysis.
Strengths
Weaknesses
Opportunities
Threats
Once you identify these criteria, you factor in feasibility and cost accounting, and a trend should emerge indicating if there is a chance for success or not.
You need to be more specific but in general terms:
Pros could be reward from fresh energy injected into a new project
Con could be high risk therefore loss on investment.
what is the company?
How long has the company been established?
What is the new project?
Is it realistic?
Is the budget for it realistic?
Does it have protential?
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