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In the first paper the author has argued that one of the most common methods to evaluate a mining project is the DCF method. DCF techniques constitute the basis of investment decisions for most mining companies. Citing in literature review he stated that in 1995, Bhappu and Guzman surveyed 20 mining companies located in the USA, Canada, Mexico, Australia, and Great Britain and found that majority of mining companies had used the DCF method for project valuation (Bhappu and Guzman, 1995). The author has also compared various project evaluation methods and in one of the instance has cited that the accuracy of the input parameters of a project is still a major factor for reliability of all methods. If the uncertainty of the input parameters of the project is zero, the result of DCF and RO(real options) will be the same (Mun, 2003). He further had cited that the similar survey has been conducted by Slade (2001) and has concluded that although there were considerable variations across the firm in using valuation techniques but majority had used the DCF valuation method. In concluding his study he has stated that an 'ideal' mining project evaluation method needs to answer the following questions for the decision maker. First, "when to make the investment and development of the project"? Second, "how much to produce annually"? Although all four methods presented in his paper (DCF, DT, MCS, RO) can be used in investment analysis, there is no single method that can be entirely adequate for the evaluation of mining project. He further states that many mining companies feel comfortable with point estimates of all evaluation parameters but realise that no parameter value is known with certainty. Although DCF methods do not allow for managerial flexibility, all the input parameters are known with certainty for the entire life of the project, decisions must be made on a 'now or never' basis and usage of appropriate discount rate is crucially important , it is easy to calculate.
In the next paper the writer has argued that various organizational leaders have a many factors to consider when choosing an IT project. There are a variety of potential tools for project prioritization available to these managers, however, when leaders must decide which technology investments to allocate funding to, it can be difficult to decide what factors are the most important. The author here further emphasizes that organization leaders should include fiscal responsibility, strategic direction, and resource availability when prioritizing projects. Net present value (NPV), internal rate of return (IRR), return on investment (ROI), and other measurement tools are useful, but used separately, provide incomplete answers. When a variety of measurement tools are combined, a more complete measure of value can determine. In this paper the author has considered that information technology projects as investments that an organization makes, generally expects a positive rates of return. This philosophy is not new (Applegate, McFarland, & MCKenney, 1996). Over here the author has combined NPV, IRR and RIO formulas into a single investment model that can be used to evaluate the expected return from an IT project. When applied to all of the potential projects that an organization might initiate, it produces a numerical score that can be used to rank IT projects. The IRR is calculated by using the standard accounting practice of forcing the net present value of a give project to equal zero (Meredith, 2003). The Discount Rate is determined by obtaining the highest opportunity cost (FinAid, 2003). Further the author cites that (Applegate et al., 1996) suggested that information technologies are investments just like any other capital expenditure, and that they have costs and expected rates of return. They suggested that an organization's IT projects should be considered as an investment "portfolio" that balances risk and rates of return. Businesses use a variety of formulaic techniques for justifying capital expenditures. Return on Investment (ROI), Internal Rate of Return and Discounted Cash Flow / Net Present Value are some of the most common methods used (Cassidy, 1998).
The primary subject matter of the last article concerns the issues surrounding evaluation of capital expenditures. Article provides a systematic approach to evaluating capital expenditures including a review of alternative capital budgeting methods and the relationship between cost of capital and capital budgeting. Secondary issues include cost of capital theory and the advantages and disadvantages of financial leverage.In this article the author has taken the case of St. Louis Chemical. St. Louis Chemical is a regional chemical distributor, headquartered in St. Louis. Don Williams, the President and primary owner, began St. Louis Chemical five years ago after a successful career in chemical sales and marketing. The company reported small losses during it first two years of operation but has since reported increasing sales and profits. The growth has required the acquisition of equipment, expansion of storage capacity and increasing the size of the work force. The unexpected withdrawal of one of St. Louis Chemical's competitors from the region has provided the opportunity to increase its packaged goods sales, in particular, sales of material in 55 gallon drums. However, St. Louis Chemical's 55 gallon drum filling equipment is already operating at capacity. To take advantage of this opportunity, additional equipment must be obtained, requiring a major capital investment. It is estimated that St. Louis Chemical must increase its drum filling capacity by at least 200,000 to 400,000 drums annually. The firm has no systematic capital expenditure evaluation process or an estimate of its cost of capital. In the past Williams the owner of the company had reviewed investment alternatives and made the decision based on his "informal" evaluation. The author plans to develop a formal capital budgeting process using Cash Payback, Net Present Value (NPV) and the Internal Rate of Return (IRR) evaluation methods. She will need to educate Williams on the superiority of a formal evaluation process using these methods. The author here has decided whether to accept or to reject the proposal using Cash Payback, Net Present Value (NPV) and the Internal Rate of Return (IRR) evaluation methods.