Business Decision Making

Business Decision
Making

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
2. Calculation of NPV............................................................................................................3
3. Analysis:.............................................................................................................................4
4. Practical implications:........................................................................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Business Decision-making is an intrinsic aspect of modern managerial and governance
within business. Basically, the main role of management is taking fair or sensible decision-
making. It involves all critical steps involved in taking business related decisions. Decisions
taken by managers should bear a value for business also according to the business needs and
requirements (Zeng, Chen and Li, 2016). This study assessment covers multiple aspects of
business decision-making and terms and factors which are used in relation to it like NPV,
payback time as well as financial/non-financial variables.
TASK 1
1. Calculation of the payback period
For Project A
Calculation of payback period of project A
Year Net Flow Total
1 8000 (40000)
2 12000 (32000)
3 16000 (20000)
4 20000 (4000)
5 30000
Payback period = 3 years and 2.4 months.
For Project B
Year Net Flow Total
1 10000 (60000)
2 20000 (50000)
3 25000 (30000)
4 30000 ( 5000)
5 40000
The Payback Period is: 3 years and 2. months.
2. Calculation of NPV
Year Net Cash Flow £ Discount Factor At 12% Present Value
1 8000 .893 7144