Submitted by nielsk80 on December 17, 2007

• Category: Business
• Words: 1051
• Pages: 5
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Silicon Arts, Inc. Capital Budgeting

Introduction
Silicon Arts, Inc. (SAI) is a four-year-old manufacturer of digital imaging Integrated Circuits (ICs) that are used for digital cameras, DVD players, computers and medical and scientific instruments. SAI is currently evaluating whether to expand its existing digital imaging business or enter the wireless communications market where it has developed a chip that looks promising. The remainder of this paper will examine the capital budgeting process for both projects, discuss the risks for each project and present plans to mitigate the risks.
Analysis
Net Present Value (NPV) and Internal Rate of Return (IRR) are the two main rules used to determine which...

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