Capital Budgeting and Government Regulations Airline Industry

LONG-TERM CAPITAL BUDGETING IN AIRLINE INDUSTRY

Government regulation: Why or why not

Major reasons for government involvement in a market economy

Interests of stockholders and managers: The convergence

Airline: Merger or new capital investment

LONG-TERM CAPITAL BUDGETING IN AIRLINE INDUSTRY

For profit organizations have shareholder's profit maximization as the main aim to pursue. Traditional managerial economics expects that all projects/investments having positive net present value (NPV) shall be initiated by the business managers. However, in real life there are different impediments to carrying out all investments having positive NPV. Main limitations that may restrict future investments arise from government regulations regarding merger and acquisitions (M&A), strategic fit to organization's long-term goals, and risk mitigation measures. In this paper it is analyzed that what are the main limitations that capital investment model faces with respect to government regulations. Although, different financial ratios analysis such...
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