Business Decision Making

Business Decision Making

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
NPV..............................................................................................................................................3
Payback period.............................................................................................................................4
Financial factors...........................................................................................................................4
Non financial factors:...................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................1

INTRODUCTION
Business decision-making is very important as it will guide the direction to the business.
ABA plc cycle brand company operating in UK as well as in Europe (Hermann, 2019). This
study will discuss the NPA and payback period of both projects and further will discuss the
financial and non financial factors which affect the decision-making process of the company.
MAIN BODY
NPV
It is the difference between of present values of cash inflows and outflows.
NPV for project A
year Cash flow PV factor @ 16% Discounted cash
flows(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
NPV for project B
year Cash flow PV factor @ 16% Discounted cash
flows(in €)
1 46000 1.16 53360
2 55000 2.32 127600
3 60000 3.48 208800
4 80000 4.64 371200