Pertemuan 26 (Twentysixth Meeting) Matakuliah : J0084 / Introduction to Management and Business Tahun : 2007 Versi : 1 / 3 Pertemuan 26 (Twentysixth Meeting) Business Expansions

Learning Outcome Student should be able to implement effective business expansion strategies which very needed to develop investment -> C3

Learning Outline Investment Decision Steps of Capital Budgeting Implementation Business Merging and Others Restructuring Forms Short Term Investment Decision

1. Investment Decision a. How Interest Influence Investment Decision b. Capital Budget c. Classification of Capital Expenditure 1) Expansion of existing business 2) Development of new business 3) Investment to asset that will decrease cost

2. Steps of Capital Budgeting Implementation a. To Propose New Project b. To Estimate Project Cash Flow c. To Determine If That Project is feasible to be Done d. To Implement feasible Project e. To Monitor Implemented Project

3. Business Merging and Others Restructuring Forms a. Types of Business Merging: 1) Horizontal merger 2) Vertical merger 3) Conglomerate merger

1) Horizontal merger First Union Corporation Wanchovia Corporation Bank Bumi Daya Wanchovia Corporation Bank EXIM

2) Vertical merger Automotive Industry Potential Potential Customer Supplier Battery Producer Automotive Industry Potential Customer Newspaper

First Union Corporation 3) Conglomerate merger First Union Corporation Bank Bumi Daya Aviation Industry

b. Various Motives of Company To Make Business Merging: 1) Instant growth 2) Economic scale 3) Managerial Experience 4) Tax profit

c. Joint Merging Analysis: To Identify potential prospective business merging 2) To evaluate potential prospective business merging 3) To decide business merging

d. Business Merger Procedures 1) To fund business merging 2) To offer bargaining 3) To integrate business 4) To evaluate post business merging

e. Protection from Take Over f. Leveraged Buyout g. Divestation

4.Short Term Investment Decision: a. Liquidity Management b. Accounts Receivable Management c. Inventory Management