Business Finance (Assessment 2) - Investment Techniques, Performance Indicators, and Pricing Strategies

BUSINESS FINANCE
(Assessment – 2)

Contents
INTRODUCTION...........................................................................................................................................3
MAIN BODY.................................................................................................................................................3
Capital investment decision.....................................................................................................................3
Analysing and comparing the internal and external performance indicators..........................................9
CONCLUSION.............................................................................................................................................13
REFERENCES..............................................................................................................................................15

INTRODUCTION
Business finance refers to the funds necessary to implement retail operations. Mostly every
company activity necessitates some form of funding. Business finance is a broad phrase that
refers to a variety of operations and specialties centered on the utilization of resources and other
tangible resources. It's a broad phrase that refers to a variety of operations and specializations
centered on the liquidity management and some other tangible assets. To start a firm, run it,
modernize it, increase it, or broaden it (Althnian, 2021). It is necessary for the purchase of a wide
range of assets, both visible and immaterial, such as technology, companies, structures, and
workplaces. In this report consist of investment techniques like Payback period, IRR and NPV to
analysis in which project invest for good return. Along with compare internal as well as external
performance indicators and discuss various types of pricing strategies.
MAIN BODY
Capital investment decision
The payback period:
Project 1
Year Net Cash flows Cumulative cash flows
1 100,000 100,000
2 150,000 250,000
3 130,000 380,000
4 80000 460,000
5 50000 510,000
Initial Investment 360,000
Payback period = 2 years + [(360000 - 250000) / 130000 * 12
months
2 Years + (110,000 / 130000) * 12 months
2 years + (0.846 * 12 months)