ASSIGNMENT

ON
COMPUTER APPLICATIONS IN BUSINESS


SUBMITTED TO,
Dr.SHIJIN S
ASSISTANT PROFFESOR
DEPARTMENT O COMMERCE
PONDICHERRY UNIVERSITY
SUBMITTED BY,
Jyotish. T
REG. NO:
1
ST
SEM. M.COM (B.F)
SECTION: A
TOPIC;
ANALYSIS OF INVESTMENT PROPOSAL by "Tata-JLR in Dubai"
INTRODUCTION;
In this assignment we are going to analyze the financial viability of investment proposal made
by Tata-JLR on Dubai. Tata acquired JLR (Jaguar Land Rover) since 2008.And in the process of
expanding the JLR market in the Middle Eastern counties Tata came up with a new proposal of
building a new manufacturing plant in Dubai.
The proposal was in such manner that Tata is going to invest full investment is done by Tata as
in the form of equity capital. In here the amount Tata has going to invest is Dubai is 100 million
pound that is 1011.3 core Indian currency .
In here I am going to analyze that the proposal made by Tata motor in its new plant will be
profitable or not for future. By analyzing we will be able to know whether to invest in the
proposal or not to invest in the proposal.
In this analysis we are making some assumptions
Tata-JLR
Tata motor is acquired
Temasek Holdings is an investment company owned by the Government of
Singapore. It manages a portfolio of s$198 billion at the end of March 2013.This investment
Company was incorporated in 1974 by an Act of parliament in Singapore. The present chairman
Of Temasek Holdings is S.Dhanabalannand its headquarters is situated at Singapore. It holds
Investments in many large foreign companies, including ICICI Bank, Bank of China, Standard
Chartered etc.
The investment proposal made by Temasek on 11
th
March 2011 was based on
The returns earned by the investors of Health Care Global Enterprises (HCGE).HCGE is a
Bangalore based cancer care provider.I got their information regarding investment from the
website.


ANALYSIS AND INTERPRETATION

This investment proposal is evaluated by using two important evaluation techniques ie.NPV
method and IRR method. Under Net Present Value method npv is calculated which is the
difference between present value of cash inflow and cash outflow. if the npv is positive the
investment proposal will be accepted. Here the npv is 50.39 which is positive. So this
investment proposal is a profitable one as per npv method.
Internal rate of return is the rate at which present value of cash inflow is equal to the present
value of cash outflow that is it is the rate at which npv is zero..If irr is greater than the discount
rate that is the expected rate of return of the investment, we will accept the proposal. In this
project proposal the irr is 31% and discount rate is 18%, which means irr is greater than
discount rate so it is a profit yielding investment proposal.
Opportunity cost is the cost of next best alternative. It is the cost of the best alternative
forgone by a decision. If the TEMASEK invest their 140 corers in bonds of 12.5% yield their
future value after 5 years will be 252.28 crore.the same in equity with a rate of 18% is 320
crore.Equities are more risky than bonds so the expected future value may or may not be
raised. So the opportunity cost is 252.28 crore with low risk.

CONCLUSION

Through this assignment iget idea about how an investment proposal can be evaluated using
excels.The investment proposal made by TEMASEK HOLDINGS in HEALTH CARE GLOBAL
ENTERPRISES is a profitable one. It is a viable investment proposal according to IRR and NPV
evaluation criteria.