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Considering an Investment in Internet Telephony?
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Kim is an CIO for a major department store chain. Managers & employees @ various stores around the country contact ea. other by phone every few minutes. Long-distance phone rates have increased in recent yrs., & the retailer's top managers have asked Kim to explore possible technological approaches to reducing the company's phone bills
After considerable analysis by her staff, Kim has found a potential long-term solution: an internet phone sys. Kim & her staff can link all the phones throughout its chain using the firm's existing computer network.
Kim put together a budget for the equipment required to install the proposed internet phone system Just a few minutes after she transmits the budget, Kim learns that the market interest rate increased that morning She wonders if senior management will be as willing to approve the proposal.
1. What long-run return does Kim's Co. stand to gain from a near-term investment in the internet phone system?
2. Why is Kim justified in wondering if senior management might be less willing to invest in an Internet phone system in light of the rise in market interest rates?
After considerable analysis by her staff, Kim has found a potential long-term solution: an internet phone sys. Kim & her staff can link all the phones throughout its chain using the firm's existing computer network.
Kim put together a budget for the equipment required to install the proposed internet phone system Just a few minutes after she transmits the budget, Kim learns that the market interest rate increased that morning She wonders if senior management will be as willing to approve the proposal.
1. What long-run return does Kim's Co. stand to gain from a near-term investment in the internet phone system?
2. Why is Kim justified in wondering if senior management might be less willing to invest in an Internet phone system in light of the rise in market interest rates?
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1. The long term gain will be ofcourse less phone bills and more productivity as the employee will discuss more problems and solve over the net phone which is almost negligiable in cost compared to conventional phone systems.
2.When the market interest rates increase then he borrowing cost for the new project will be more than what she had analysed for and this is where Ki...
2.When the market interest rates increase then he borrowing cost for the new project will be more than what she had analysed for and this is where Ki...
Answer Date: 01:13am 05/04/08
