Business Decision making

Business Decision making
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Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................5
TASK 1............................................................................................................................................5
Calculation of payback period.....................................................................................................5
Working out of Net Present Value...............................................................................................6
Financial factors...........................................................................................................................8
Non financial factors....................................................................................................................8
CONCLUSION................................................................................................................................8
REFRENCES...................................................................................................................................8
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INTRODUCTION
Business decision making is essential component for every business organization. Success of an
organization depends on the skills of decision taking of an manager. Thus this report is prepared
for identified the importance and procedure of decision making. For this purpose XYZ plc had
been selected. This organization is a branch of the hotel chain of Britain which provides high
quality of hospitality service to their customers. This report considers the techniques used by
mangers to take decision and role of financial and non financial factors in the process of decision
making.
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TASK 1
Payback period: It refers as the process of capital budgeting used for time requisite to get back
the funds exhausted in an outlay. In other words payback period is used to calculate the time
required for business organizations to reach their breakeven point of the project process. This
method of the process of decision making is useful for small entrepreneurs as they can easily
calculated the best alternative within a short time period (Nasif and Roslan, 2015).
Calculation of payback period
Software project A
Year Cash inflow in £ Cumulative cash inflow
1 28,000 28000
2 32,000 60000
3 35000 95000
4 55000 150000
5 78000 228000
Formula of payback period= Base year +primary outlay- collective cash inflow of base year /
future year cash inflow
3+100000-95000/55000= 3.90
Payback period for Laundrette Project
Year Cash inflow in £ Cumulative cash inflow
1 31000 31000
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