Business Decision Making: Tools and Analysis for AJ plc

Essay on Business
Decision-making

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
Calculation of different tools..................................................................................................3
Analysis of above-mentioned factors.....................................................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Decision-making refers to the process of taking decisions by recognizing a goal, collecting
information, and comparing the alternatives. Different steps that are taken by a business that are
done in the view of attaining the missions and visions of the business are referred to as business
decision-making (Jiang, and et.al. 2021). In these the first step that is taken up by the business is
setting up objectives and goals and after that making a decision that would help the business
achieve it. This report tries to aid the strategic managers of AJ plc in order to determine which
project they should take up. This is done with the help of tools like payback period, net present
valuation and other financial and non-financial aspects.
TASK
This report revolves around the case of AJ plc. AJ plc is a sweets producing business who is
making arrangements to participate in a plan related to vegan products. The strategic managers
of the firm have drafted 2 different manufacturing plans which are, Project A- Vegan chocolates,
Project B- Vegan spread. The company is planning to invest in one of the projects. The further
discussion may help the strategic managers in deciding which project will be beneficial for the
business to invest in (Vieira, Pinto-Varela, and Barbosa-Póvoa, 2019). Discussion related to
different tools used in decision-making are as follows:
Calculation of different tools
Payback Period is that accounting concept which calculates the duration by which the company
will gain its primary cost of venture (Ferraris, Mazzoleni, Devalle, and Couturier, 2019). This
tool helps the strategic managers to evaluate the two or more investment decisions in the
business. AJ plc is the investor who wants to choose which plan of venture reimburses back its
primary investment at earliest.
Duration Yearly cash flow
of A (£)
Cumulative cash
flow of A (£)
Yearly cash flow
of B (£)
Cumulative cash
flow of B (£)
0 (Initial
Investment)
-140,000 -140,000 -120,000 -120,000
1 year 52,000 -88,000 46,000 -74,000
2 year 58,000 -30,000 60,000 -14,000