One capital investment that State Insurance Company Limited might need to secure financing for in the coming fiscal year is the purchase of a new claims processing system. The estimated cost of the new system is $10 million, and the funds would be allocated as follows:

• Hardware: $5 million
• Software: $3 million
• Training: $2 million

The new claims processing system would be a significant investment, but it would also bring a number of benefits to the insurance company. These benefits include:

• Increased efficiency: The new system would be more efficient than the current system, which would lead to faster processing of claims and lower costs.
• Improved accuracy: The new system would be more accurate than the current system, which would reduce the number of errors and the amount of time spent on rework.
• Enhanced customer service: The new system would allow the insurance company to provide better customer service, which would lead to increased custom

Use scenario above to provide the following:

1a: Level of Risk

1. identifies three to five risks of engaging in the capital investment project for the insurance company .

b.give a thorough and detailed proposal of this project's level of risk.

1b: Managing Risks

Give a thorough and detailed explanation of how willing or capable they believe the organization is to take on and manage these risks.

1c: Trade-Offs Between Risks and Returns

provides a thorough and detailed summary of the trade-off between the risks and returns of going forward with this capital investment project, including their recommendation of whether the organization should move forward with the project or not.

Reference

Answer rating: 100% (QA)

1a Level of Risk The key risks associated with this capital investment project include 1 Technology Risk There is a risk that the new claims processing system may not perform as expected or may have c... View the full answer