Forevery business, the core aim is to make a profit. The best ways ofachieving this are by realizing risks and know how to handle and makean investment profitable. Decision analysis should be criticallyanalyzed before one chose to invest in any business. For a rightdecision to be achieved practical skills in evaluating and explainingdifficult public policy should also be scrutinized well. The analysisof the two categories the Miyako and Tavaglione shows the importanceof decision making when comes to the establishment of the investment.
Thediagram below shows the decision analysis tree, which helps thecompany from coming up with the right decision whether to establishor not.
Analysis between Miyako and Tavaglinone
Fromthe above table, the annualized cost calculated shows remodel hashigher annualized cost compared to that do not remodel. It might bedue to risks with lowers the costs. They affect the cost of theservice hence results in variation. The variation alsomakes the cost earned from the personal that enjoys the service(Peter& Pierra, 2003).
Fromthe statistic above, the annual revenues are higher in remodelingthat does not require remodeling. The series increase in that urbanRenaissance has the largest followed by Status Quo and final withDowntown Deteriorates. From the results above, the urban Renaissanceboth in the remodel and do not remodel have high revenue. It is sobecause the numbers of customers are higher compared to other risks.Also, the cost per customer is higher hence results to a higheramount of revenue collected.
Fromthe table above, the amount of total revenue obtained without riskdiscounting is higher than revenue obtained when discounting risks.It, therefore, essential to exclude risks since they are one of thesources that consume a lot of revenues. The company that takes risksinto considering should be cautious when dealing with(Peter& Pierra, 2003).
Fromthe decision tree, the developer should invest in Tavaglinone andremodel than in certain Miyako, this is because the net revenueobtained from the Tavaglinone is higher compared to Miyako. Hence,the investor will make a lot of profits when investing in them thancertain Miyako. Also, the number of customers will be high when therestraint is renovated despite there is a cost for renovation but thereturn is higher. The recommendation to the investor is to the investin the Tavaglione. When comparing money invested to in Tavaglione,and the net revenue obtained, the investor make a lot of profits.
Fromthe three investments, the most favorable investment decision is theTavaglione remodel. This is because revenue obtained from theremodel after discounting for the risk is much higher. On the otherhand, the revenue obtains after do not remodel lower. On certainMiyako has fixed net revenue of only 1 million which is also lowercompared to two ways (Peter & Pierra, 2003).
Thereason to support my choice is because it has it brings higherrevenue than the two. In conclusion, it is important for the analyststo review all risks before setting up an investment. The rightdecision the analyst makes the higher profit it realizes. Also, risksare one of the changes that affect any investment. Hence, theanalysis is very important to any organization.
Peters,B., & Pierre, J. (2003). Handbookof public administration.London: Sage Publications.(Peter & Pierra, 2003)