The causes and consequences of an investment project of x (a Essay

The causes and consequences of an investment project of x (a corporation) - Essay Example The paper also analyzes and discusses change in capital structure and the consequences of change in the structure. This is to enhance understanding of this project and, thus, promote its implementation. The project would involve introduction of various assets like planes and offices that make the company incur costs. These costs fall into two categories, namely, assets’ costs and implementation costs. According to QA (2012), the project was initiated on July 2012 and it was approximated to last for about five months. However, the assets involved have long-term durability. This would make the project viable despite the costs expected to be incurred. An expanded business would result in increased revenues. This increase in revenue would raise the profit margins of the company (Megginson & Smart 2008). The company would use the increased profits to recover the costs incurred during project planning and implementation. Since the project would go in phases covering two years, the process of recovering costs will not be instant. The rate of return for this project is recommendable, since it involves assets leading to increased business. The net present value of the assets introduced in this project is $ 50 billion. Previously Qatar Airline had been financing its projects through several capital structures. Capital structure of an organization consists of debts and equity funds (Woelfel 1994). The major capital structure previously used by Qatar Airline was a borrowing from financial institutions, since the earlier projects were not large in magnitude. However, issuing of bonds sometimes proved to be a mandatory requirement, since they served as a supplement. The current projects are large and, thus, they need many resources in order to implement them. This has caused this company to shift from this funding structure to a new one. Qatar Airline uses dividend payout, retained earnings, and issues of shares to fund its projects. Dividend payouts