Business Decision Making

Business Decision
Making

Table of Contents
Table of Contents.............................................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Comparison of the key aspects of different types of tools like payback period, net present
value and different types of non-financial and financial factors that are used in decision
making.........................................................................................................................................1
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
All the business entities pay attention towards business decision making as it is the
procedure of forming effective decisions for future. If it will not be focused by the businesses
then it may result in failure of operations. Apart from this it may also affect the functionality of
business (Kim, Kim and Lee, 2018). This essay is based upon analysis of different tools that are
focused by businesses in decision making. The entity which will be analysed in this project is A
& B Plc restaurant. This essay will be focused with different elements such as pay back period,
net present value and various types of financial and non-financial factors.
MAIN BODY
Comparison of the key aspects of different types of tools like payback period, net present value
and different types of non-financial and financial factors that are used in decision making
For all the business organsiations it is very important to make sure that they are
formulating effective decisions for betterment of the entity so that all the long as well as short-
term goals could be accomplished. A & B Plc is a restaurant chain which is carrying out its
operational activities in UK and specific areas in Europe. It has been planned bythe entity that it
should make investment one of the services that are outsourced by it. These are dishwashing and
software. For the purpose of selecting best suitable one from both of them two specific
investment appraisal techniques will be used. Apart from this, different financial and non-
financial factors will also be focused for the decision making. Discussion of all of them along
with the calculations is as follows:
Provided information contain the investment for the dishwashing option is 120000 and for
software it is 150000. The rate of discount for them is 14% and all the calculations will be made
on the basis of this data.
Payback period is a capital budgeting technique which is utilised by companies to
analyse that the project in which funds will be invested will be able to recover the whole cost in
less or high time (Nuthall and Old, 2018). In order to formulate the decision of investing in one
of the projects A & B restaurant can use this method. The calculation on the basis of it for both
the projects is as follows:
Formula: Years covered by the project + total investment – cumulative cash inflow for
the year/ cash inflow for next year
1