Business Decision Making Analysis

This assignment delves into the realm of business decision making by presenting a case study. Students are tasked with analyzing a specific business situation, employing quantitative techniques such as cost-benefit analysis and statistical methods. Decision-making frameworks like the analytic hierarchy process will be applied to evaluate various options. The use of data visualization tools, including bar graphs, line graphs, scatter plots, and Gantt charts, is essential for presenting findings and insights derived from the analysis.

BUSINESS DECISION
MAKING

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Background............................................................................................................................1
1.1 Rationale................................................................................................................................2
1.1 Objectives of the research......................................................................................................2
1.2 Methodology..........................................................................................................................2
1.2 Data Analysis.........................................................................................................................3
1.2 Time Frame............................................................................................................................3
1.2 Budget section.......................................................................................................................4
1.3 Questionnaire.........................................................................................................................4
TASK 2............................................................................................................................................6
2.1 & 2.2 Mean, Mode and Median.............................................................................................6
2.3 Range and Standard Deviation..............................................................................................8
2.4 25th Percentile (Lower 25th Percentile (Lower Quartile) and 75th Percentile (Upper
Quartile) and use of Percentile....................................................................................................9
TASK 3..........................................................................................................................................11
3.1 & 4.1 Produce line graph.....................................................................................................11
Scatter Plot on Advertising costs and sales...............................................................................15
3.2 & 4.1 Trend Lines................................................................................................................16
3.3 Business presentation...........................................................................................................18
3.4 Formal Business Report.......................................................................................................18
TASK 4..........................................................................................................................................19
4.2 Prepare a network diagram for activities using Microsoft Project......................................19
Calculate Project Duration.........................................................................................................20
Clearly mark the Critical Path...................................................................................................20
Prepare a Gantt chart and state the benefits of using it as a Project Management Tool............21
TASK 4 B......................................................................................................................................21
4.3 Calculation of Net present value and internal rate of return................................................21
Recommendations......................................................................................................................25
CONCLUSION..............................................................................................................................25
REFERENCE................................................................................................................................26

INDEX OF TABLES
Table 1: Descriptive Analysis..........................................................................................................6
Table 2: Measure of Dispersion.......................................................................................................8
Table 3: Correlation and Coefficient.............................................................................................11
Table 4: Project A @ 10%.............................................................................................................22
Table 5: Project A @ 20%.............................................................................................................22
Table 6: Project B @ 10%.............................................................................................................23
Table 7: Project B @ 20%.............................................................................................................24
ILLUSTRATION INDEX
Illustration 1: Line graph...............................................................................................................14
Illustration 2: Net Income Generated by 5 Branches of the company in 2015..............................15
Illustration 3: Bar Graph of Net Income Generated by 5 Branches of the company in 2015........15
Illustration 4: Advertising and Sales data 2000-2013....................................................................16
Illustration 5: Scatter Plot on Advertising costs and sales.............................................................16
Illustration 6: Advertising costs ....................................................................................................17
Illustration 7: Sales........................................................................................................................18
Illustration 8: Network Diagram....................................................................................................20
Illustration 9: Gantt chart...............................................................................................................21

INTRODUCTION
In the present business environment, every business entity determines various strategies
in order to take different management decisions with an appropriate manner. The is because an
efficient decision-making process ensures the success of organization. By taking different
strategic decisions with an appropriate manner, management can improve operational
capabilities and efficiency of business entity with reference to short and long term business goals
(Hofmann, 2007). In this process, management examines several factors that are having direct
impact on outcomes of business decisions. It also supports management for selection of best
alternative from various options as per the distinct business requirement. The present report is
carried out detail evaluation of different case studies and business scenarios and develops
appropriate strategies to generate appropriate outcomes. In this process, wide range of statistical
tools and techniques are applied for evaluation of distinct kind of data in order to take
appropriate decisions. In the context present study, this report also uses different investment
appraisal tactics through which an organization is able to select best investment alternative for
business expansion that would increase profitability of company and reduces risk related to
investment.
TASK 1
1.1 Background
As per the given, it is found that Government of UK is planning to initiate a Crossrail
Project through which the public authority of UK will be able to enhance the local transport
connectivity within London. This project will increase transportation facilities so as citizen
would get quick and high speed mode of transportation. The primary objective of this project is
to offer city transport facilities to more than 1.5 million. Furthermore, this project provides
significant support to public authorities in the form of employment, leisure and other business
operation. As per the case study, it is addressed that the first cross-rail will be started from
central London in late 2018 and will carry more 200 million passenger annually. Furthermore, it
will reduce the journey time across London with the help of a high speed and affordable mode of
transportation. The project cross-rail will be beneficial of public authorities and local citizen
because it will transform the rail transportation and increase the capacity of public transport by
10%. Therefore, it can be stated that success of the project is greatly depending on its timely
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completion so as government authorities have to develop various strategies and need to take
appropriate management decision in order to keep the project on the right track.
1.1 Rationale
The primary objective this project is to enhance transportation services to local citizen
along with external so as people would get comfortable and quick transportation facilities. In
addition to that this project will be found very effective in minimizing the road traffic through
pollution level can be controlled. It ensures safety of environment by lowering pollution level
(Lucey, 2005). Furthermore, the investigator is focusing on assessment of the benefits of
Crossrail project for the local community along with external visitor. Therefore, the present
investigation is carried out to evaluate several factors of cross-rail project that assists researcher
in facilitation of appropriate and detail information about the benefits of the project of
government officials and managers of public authorities.
1.1 Objectives of the research
The primary objective of the present research is examining positive aspect of the Cross
Rail project for the local community of London. In addition to that the present research is
scheduled to evaluate the budget and time frame associated with cross-rail project. The three
main objective of the present investigation are mentioned below:
 To assess the positive outcomes of the project that would be assessed by general public.
 To identify whether this project will provide significant benefits to economy of London.
 To evaluate the role of cross-rail project in completion of future transportation
requirement.
1.2 Methodology
With reference to present given scenario, investigator requires to assess wide range of
information to generate appropriate and accurate outcomes therefore researcher is applying both
primary and secondary information associated with the Crossrail project that would assist public
authority in order to take appropriate business decisions for attainment project goals. In this
context, researcher has selected the random sampling approach for selection of best sample
through investigator would assess appropriate information for public authorities (Hacklin and
Wallnöfer, 2012). For collection of first hand information, a sample of 50 local citizens will be
taken by researcher who will be affected from cross-rail project. Firstly, qualitative techniques
researcher will be found very effective to enhance the understanding about the perception of
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local people towards particular project that would helps researcher for generating appropriate
research outcomes as per the aim of present research. Along with this, using quantitative
techniques will be found very effective in evaluation of different statistics along with numerical
data (Nicholson and Aman, 2012). In primary section, people of London will be provided
questionnaire for assessment of the perception of people about the project of cross-rail through
which public authorities are able to take appropriate decision associated with the project.
1.2 Data Analysis
In the present study, researcher will apply distinct tools for evaluation of data that have
been gained from distinct sources. In this context, thematic and statistical approaches will be
considered by researcher. However, thematic analysis will provide significant assistance in
evaluation of the subjective or qualitative that will be acquired in the form of primary data or
through questionnaire (Wallnöfer and Hacklin, 2012). On the other hand, statistical approach
will help investigation in order to interpret the numerical information associated with budget and
cost of project along with its benefits to public authorities
1.2 Time Frame
Activities/ duration in week 2 4 6 8 10 12 14 16
Analysing the situations
Determination of objectives
Selection of an appropriate
Methodology
Collecting qualitative and
quantitative data
Evaluation of data
Development of formal to
report to present data
Estimation of the budgets
Assessment of whole project
and implement improvement.
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1.2 Budget section
It is considered as most important aspect of particular. The budget section is determined
the total expense that should be managed by researcher for carrying out the research on Crossrail
Project. However, the estimated cost of whole research is £2000 in which researcher will be able
manage different operations of investigation.
Expenses Amount
Assessment of secondary data £500
Research collection from Primary data £600
Stationary costs and research software cost £700
Fuel Cost £120
Miscellaneous expenditure £80
Total £2000
1.3 Questionnaire
For collection of primary data, researcher develops a questionnaire in order to assess the
perception of local people of community. The questionnaire for present investigation is
mentioned below:
Name:
1: Gender
 Male
 Female
2: Age Group :
 16-20 years
 21-25 years
 26-30 years
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 31-35 years
 35 and above
3: Do you have knowledge about the upcoming “Crossrail” project of the government of UK?
 Yes
 No
4: According to you what is the most important benefit that would you assess from cross rail
project?
 Enhancing travel experience
 Increase in connectivity of the public transportation
 New experience of travelling around the capital
 Reduction in load on existing transportation system
5: Do you think, Crossrail project would develop new opportunities for employment?
 Yes
 No
6: Do you agree that Crossrail will be found as important milestone of economic growth in the
London?
 Strongly Agree
 Agree
 Neutral
 Disagree
 Strongly Disagree
7: Would you like to you use different services of Crossrail Project?
 Yes
 No
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8: Do you think that Crossrail project will change the era the city of transportation?
 Yes
 No
9: Will cross-rail project reduce the pollution by lowering traffic?
 Yes
 No
 Maybe
TASK 2
2.1 & 2.2 Mean, Mode and Median
Table 1: Descriptive Analysis
Amount Spent
(£)
No. of
Customers (f) Mid-value (x) Fx
Cumulative
Frequency (CF)
10-20 20 15 300 20
20-30 22 25 550 42
30-40 20 35 700 62
40-50 14 45 630 76
50-60 16 55 880 92
60-70 10 65 650 102
70-80 8 75 600 110
80-90 6 85 510 116
90-100 4 95 380 120
120 5200
By using above descriptive analysis, store manager is able to take appropriate decision
regarding store promotion with the help of various elements that play significant role in decision
making process. Mean: This approach examines the sum of all numeric information which has been
collected from different sources as per the different business requirement. In the present
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study, the mean value is used to examine the number of customers and their actual
spending of cloths (Weygandt, Kimmel and Kieso, 2009). This information will support
owner of the Carmen clothing shop for taking wide range of business decision associated
with the promotion and advertisement through which profitability and sales of shop will
be increased.
Mean = Total of Fx/ Total of number of customers
= 5200/120= 43.33
 Mode: It is determined that number that consists maximum frequency while collection of
different kind of data. In the present research, it has been found that maximum number of
customers is spending between £20 & £30 on clothes. This is because customer spending
between £20 & £30 has recorded highest frequency of 22 customers. Therefore,
calculation of mode of present study is carried out below:
Mode = Lmo + (Δ1/ Δ1 + Δ2) * i
= 20 + (22-20) / (22-20) + (22-20)* 10= 25
 Median: It is addressed as most important statistical time that determines the middle
value of the collected information (Platt and Huettel, 2008). The calculation of median
for the present research is carried out below:
Median = Lower limit + (60- CF of Previous Class Interval) /Frequency * Class
interval
= 30 + (60-42)/20*10
= 30+18/20 *10
= 30+9
7

= 39
2.3 Range and Standard Deviation
Table 2: Measure of Dispersion
Amount Spent (£)
No. of
customers (F) Mid- value(X) X^2 Fx^2 Fx
10-20 20 15 225 4500 300
20-30 22 25 625 13750 550
30-40 20 35 1225 24500 700
40-50 14 45 2025 28350 630
50-60 16 55 3025 48400 880
60-70 10 65 4225 42250 650
70-80 8 75 5625 45000 600
80-90 6 85 7225 43350 510
90-100 4 95 9025 36100 380
120 495 33225 286200 5200
Measurement of dispersion is termed as systematic process in very effective tool of data
evaluation through which researcher examine how wide spread the set of given data is in the
defined variables. The process provides significant support in evaluation of various facts and
figures so as management is able take different business decision as per the distinct business
requirement (Black, 2011). There are three major elements that are evaluated in measurement of
dispersion that include Standard deviation, Range and variance. The evaluation of these factors is
carried out below:
 Standard Deviation: The term standard deviation provides significant assistance to
researcher in order to assess the variation between given set of information or among
various variables (Kimmel, Weygandt and Kieso, 2010). In the context of present
investigation, standard deviation helps owner of Carmen clothing shop for taking
appropriate decisions related to pricing of different product by checking whether pricing
stick below 40 price range or increase it above 40.
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Variance = s2 = ∑Fx2 – ((∑Fx)2 /n)/ n – 1
Variance = 511.48
Standard Deviation = S= √s2
Standard Deviation = 22.61
 Range: In the decision making process, range assists researcher in computing the
different between highest value and lowest value from the information which have been
collected from different sources (Saaty, 2008). It also provides significant support in
different management decisions.
Range = (100-(10/ (20+1))-(10/ (4+1)))
Range = 97.52
2.4 25th Percentile (Lower 25th Percentile (Lower Quartile) and 75th Percentile (Upper Quartile)
and use of Percentile
Quartile:
In general, quartile is addressed as most important statistical approach which is applied in
different management decision. It generates appropriate data by dividing set of numbers into four
different quarters as per the requirement of study which are denoted with: Q1, Q2, Q3, and Q4.
The first quartile (Q1) determines the data in the form of middle number which is occurred
between smallest number and the median of the predetermined set of data (Dew, Read,
Sarasvathy and Wiltbank, 2009). On the other hand, second quartile (Q2) is determined median
of the data. In addition to that the third quartile (Q3) present the middle number which is
occurred between highest number and the median of particular set of data associated with a
certain investigation
Percentile:
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This statistical measure provides significant assistance to a decision taker by defining the
value which falls under a below with reference to a particular set of percentage. For instance: 25th
percentile determines 25 portion of particular set of data.
Lower quartile/25th percentile 24.5
Upper quartile/75th percentile 58.8
Interquartile range:
In general, inter-quartile range is used as a measure of variability which is derived with
reference to certain data that is divided into four different quarters. In other words, this term
determine the variation between upper quartile and lower quartile. It plays important in decision
making process within an organization.
Interquartile range 34.2
2.4 Calculating the correlation coefficient as per the additional information provided and discuss
it advantages to a business
Sales (Units) Discounts (%)
20 1
40 4
50 6
55 6
60 10
70 12
80 13
90 14
100 15
The correlation coefficient of sales and discount are given below:
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Table 3: Correlation and Coefficient
Particular Sales (Units) Discounts (%)
Sales (Units) 1 0.97
Discounts (%) 0.97 1
With reference to the formula R2 =0.97
As per the above calculation of the correlation coefficient, there is prefect correlation
addressed between the sales and discounts variable. Therefore, it can be stated that if the sales of
units is increased then discount rates are also increased in similar way and vice-verse. The value
coefficient of correlation is 0.97 that indicates that change in number of sales units significantly
influences rate of discount.
TASK 3
3.1 & 4.1 Produce line graph
As per the present case, the Managing Director of Clothing Company is acquiring clothes
from different countries in order to meet requirement of consumers with an appropriate manner.
By satisfying client’s needs with different kinds of clothes, company has gained loyalty of
consumers In regard to this, data of last 10 years associated with sales and advertising costs has
evaluated to examine the growth in sales with reference to advertisement expenditure.
Line graph:
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Illustration 1: Line graph
Pie Chart:
12
240
180 160
140
130
Net income generated by 5 branches of company
London
Manchester
Edinburgh
Cardif
Liverpool
Illustration 2: Net Income Generated by 5 Branches of the company in 2015

Bar Chart:
Advertising Costs and Sales Data of 2002 – 2015:
13
London Manchester Edinburgh Cardif Liverpool
0
50
100
150
200
250
300
240
180
160
140 130
Net income generated by 5 branches of company
Column B
Illustration 3: Bar Graph of Net Income Generated by 5 Branches of the company in 2015

Illustration 4: Advertising and Sales data 2000-2013
Scatter Plot on Advertising costs and sales
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Illustration 5: Scatter Plot on Advertising costs and sales
As per the above charts and diagram, it is evaluated that the sales performance of
Clothing Company is showing positive trends and generating attractive outcomes. There has
been several factor identified that have played important role in the success and growth of
business. It includes change in lifestyle of people, market trends and business environment that
are considered as key drivers of increased demand of the imported products and services so as
company acquires wide range of clothing products from all over the world that leads positive
impact on the sales and business performance of clothing company (Hacklin and Wallnöfer,
2012). Furthermore, it has found that advancement in marketing prospects along with the
application of different kind of promotional tools have increased the advertising related
expenditures of business entity. In addition to that the use of social media along with application
of latest tools of digital advertising has influenced management of clothing company for
investing the huge amount of funds in marketing. This approach assists business entity to attract
large number of audience that has led positive impact on the sales of organization and increases
marketing related expenditure.
3.2 & 4.1 Trend Lines
Trend lines of Advertising costs:
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Illustration 6: Advertising costs
Trend line of Sales
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Illustration 7: Sales
3.3 Business presentation
Enclosed in PPT.
3.4 Formal Business Report
To,
The Board of Directors of Clothing Company
Date: 7th January 2015
Subject: Information associated with last 10 years sales performance of the firm
INTRODUCTION
Clothing Company is making efforts to expand business associated with imported
clothing products that are greatly attracting to people of UK and generating the demand of for
company. In the process, management requires to take appropriate decision for business
expansion. Therefore, this report carries out detail evaluation of sales data of the 5 different
branches of clothing company. In addition to that evaluation of last 10 year is carried out with
the help of different graphs and charts.
METHODOLOGY
For carrying out the present study with an appropriate manner, investigator has applied
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graphical presentation approach through which investigator is able to present the information
related to sales performance with a systematic manner so as reader or evaluator of data can
easily access the information that have been presented in chart and bar diagram. Along with
this, trend lines are also created to predict the advertising cost and overall sales with in next
five years that assists managers for taking appropriate business decisions as per the long term
goals of company.
FINDINGS
As per the graphical presentation of sales and advertisement cost data, it has been found
that sales performance of clothing company is growing with an content rate due to high
demand for imported clothing products among consumers of UK. With reference to pie chart,
it has addressed that the London branch is termed as a most profitable branch because it is
generating highest net income for the company. In addition to that Manchester branch of
Clothing company is also earning good profit with the help of high sales volume. However, the
assessment of the trend lines has determined that the sales performance of other branches such
as Liverpool and Cardiff is also improving coming years because trend lines are showing
positive trends.
CONCLUSION
As per the above assessment, it can be stated that management of company needs to
develop various strategic plans and business strategies in order to grab new business
opportunities that would occur in near future. Apart from that, company is recommended to
apply different kinds of marketing tools and creative marketing tactics to increase aware of
different clothing products among target consumers that would increase sales of business
entity.
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TASK 4
4.2 Prepare a network diagram for activities using Microsoft Project
Calculate Project Duration
Critical Path: 1+2+4+5+6+7+11+12
Critical Path duration: 4+3+10+4+6+9+12+20 = 72 days
Clearly mark the Critical Path
Task Name Duration Start Finish Predecessors
Physical preparation 4 days 07/01/16 12/01/16 -
Organisational planning 3 days 13/01/16 15/01/16 A
Personal selection 15 days 13/01/16 02/02/16 A
Equipment installation 10 days 18/01/16 29/01/16 B
Personnel training 4 days 01/02/16 04/02/16 D
Detailed system designing 6 days 05/02/16 04/02/16 E
File conversion 9 days 15/02/16 25/02/16 F
Establishment of
standards 2 days 13/02/16 04/02/16 C
Program preparation 10 days 18/01/16 29/01/16 B
Program testing 9 days 01/02/16 11/02/16 D
Finishing Documentation 12 days 26/02/16 14/03/16 G, H, I, J
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Illustration 8: Network Diagram

Follow Up 20 days 15/03/16 11/04/16 K
Prepare a Gantt chart and state the benefits of using it as a Project Management Tool
Benefits of Project management tools:
The application of the project management tool has provided significant assistance to a
project manager in the form of delegation the tasks and responsibilities with an appropriate
manner, scheduling of different activities of the project, tracks the report of projects, ensuring the
quality of project outcomes, time management and etc (Albright, Winston and Zappe, 2010).
This increases the reliability and validity of the project.
TASK 4 B
4.3 Calculation of Net present value and internal rate of return
In the contemporary business environment, every organization has to take different
management and investment decisions so as management uses of kinds of investment appraisal
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Illustration 9: Gantt chart

approaches. It is a method which is used for analyzing the validity and suitability of an
investment proposal (Milkman, Chugh and Bazerman, 2012). It supports management in
evaluation of risk and return on investment. There are several techniques of appraisals used by
different companies such as NPV and IRR.
Net Present Value:
NPV is termed as a most effective and quick tool for evaluating the reliability and
feasibility of different investment proposal through which management is able to select best
alternative. In this process value of future cash inflow is evaluated with reference to certain
discount factor (Martin, 2015). This tool plays important role in evaluation of time value of
money through which management is able to select most profitable proposal for company.
Furthermore, higher value of NPV determines that particular project is good for the investment.
Initial Investment: £200000 in both the Projects
Project A @ 10%:
Table 4: Project A @ 10%
Project A
Year Cash flows PV factor @10% Amount
1 55000 0.909 49995
2 67000 0.826 55342
3 72000 0.751 54072
4 80000 0.683 54640
5 90000 0.621 55890
Total 269939
Less: Initial Investment 200000
NPV 69939
Project A @ 20%:
Table 5: Project A @ 20%
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Project A
Year Cash flows PV factor @20% Amount
1 55000 0.833 45815
2 67000 0.694 46498
3 72000 0.579 41688
4 80000 0.482 38560
5 90000 0.402 36180
Total 208741
Less: Initial Investment 200000
NPV 8741
Project B @ 10%:
Table 6: Project B @ 10%
Project B
Year Cash flows PV factor @10% Amount
1 42000 0.909 38178
2 75000 0.826 61950
3 82000 0.751 61582
4 63000 0.683 43029
5 35000 0.621 21735
Total 226474
Less: Initial Investment 200000
NPV 26474
Project B @ 20%:
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Table 7: Project B @ 20%
Project B
Year Cash flows PV factor @ 20% Amount
1 42000 0.833 34986
2 75000 0.694 52050
3 82000 0.579 47478
4 63000 0.482 30366
5 35000 0.402 14070
Total 178950
Less: Initial Investment 200000
NPV -21050
Internal rate of return:
The approach has found very effective in order to check the feasibility of an investment
proposal. It also evaluates the time value of money so as managers within particular organization
can generate good return from particular investment proposal (Albright, Winston and Zappe,
2010). In this process, IRR has found very effective in evaluation of the potential profit of the
investment in terms of percentage. Following is computation of IRR for the present projects:
Internal rate of return = lower discount rate + NPV at lower discount rate/ NPV at
lower rate - NPV at higher rate* (Higher discount rate –
discount rate)
Project A = 0.10+69939/ (69939-8741)*(0.20-0.10)
= 21.42%
Project B = 0.10 + 26474/ (26474-(-21050) * (0.20-0.10)
= 15.57%
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Recommendations
By considering the above computation of investment appraisal techniques, researcher has
been found that Project A is beneficial for company. This is because NPV of project A is 69939
which are higher than the Project B that is 26474. Therefore, on the basis of 10% discount factor
management should have to invest in Project A. This is because the Project A is generating more
returns. In addition to that the internal rate of return is of Project A is also higher as compared to
NPV of the project B. Thus, it is suggested to business entity needs to invest funds in the Project
A for generating greater returns. It will increase profitability of business and provides good
returns to firm.
CONCLUSION
As per the above evaluation, it can be concluded that business decision making is
identified as a most crucial aspect of business management which is having significant impact on
the growth and profitability of business entity. This study has found that an organization can
increase effectiveness of business decisions with the help of various statistical tools associated
with descriptive statistics through management is able to evaluate different aspect and data such
as sales performance and cost of different operations. This report has found that profitability of
business entity during investment decisions is greatly influenced by management decisions
associated with selection of an appropriate investment appraisal tactics such as NPV and IRR.
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