Question

Imagine a laboratory at Intel, late at night. One scientist speaks to another. “You’re right, Watson, I admit this experiment will consume all the rest of this year’s budget. I don’t know what we’ll do if it fails. But if this yttrium magnoosium alloy superconducts, the patents will be worth millions.”
Would this be a good or bad investment for Intel? Can’t say. But from the ultimate investors’ viewpoint this is not a risky investment. Explain why.

Answer 1

It is a good investment for Intel as if the project on which Intel is investing succeds than that patent will bring them worth millions. Any company always see investment basing on the return they will earn. The project may succed or fail , if the project succed the investor will get return more than what he is excepting where if it fails it will loose all the money he invested.

In investors point of view it is never a risky investment because they were confident that the project will succeed and even if it fails it will show them a break through of how to make it a success. Every investor is always an oppurtunist who will always hope that they will succeed and make money. According to investor point of view they will not be investing all the revenue in one project they will invest a part of money which is little amount of the revenue they earn.Evenif the project fails they will loose that money which they invested which is a part of the revenue rather than whole amount and if it succeds it will earn them more than the investment. So for an investor this project is not risky at all.