Business Decision Making

BUSINESS DECISION-
MAKING

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Calculation of Net Present Value.................................................................................................3
Calculation of Payback period.....................................................................................................4
Financial Factor:..........................................................................................................................5
Non Financial Factor:..................................................................................................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................1

INTRODUCTION
In business decision-making is important factor and it helps company to rise their profits. This
report help to analysis ABA plc business investment decision-making. ABA plc is branded cycle
company which is operating in UK. It sells cycles and electric cycles. This report help to analysis
the result of pay back and NPV it also explains NPV and pay back period and in the end it
evaluates different financial and non financial factors which effect business decision-making.
MAIN BODY
Calculation of Net Present Value
Net present value:
It refers to the value obtained from making an investment. It helps in assisting the future net cash
inflows and outflows related with the associated investment.
Project A
Year Cash flow PV factor @ 16% Discounted Cash flow
(in €)
1 35000 1.16 40600
2 40000 2.32 92800
3 45000 3.48 156600
4 80000 4.64 371200
5 92000 5.8 533600
Total Discounted Cash Flow 1194800
Less: Initial investment 140000
NPV 1054800
Project B
Year Cash flow PV factor @ 16% Discounted Cash flow