Business Decisions Making

Businesses Decisions Making

TABLE OF CONTENTS
Evaluating the feasibility of the investment plan for XYZ plc..............................................3
Effect of financial and non-financial factors used in decision making..................................6
REFERENCES...........................................................................................................................7

The process of making decision is not an easy task. For taking the decision it is very
essential for the businesses to undertake proper evaluation of each and every aspect of the
business. This essay presents about the different types of investment appraisal techniques for
the purpose of evaluating the investment plan of the XYZ plc.
Evaluating the feasibility of the investment plan for XYZ plc
The XYZ plc is willing to invest in one of its two projects, which are, software project
and Laundrette project for which it will be using the following two techniques which are
stated below.
Net present value
The net present value is used for determining the present of the future cash inflows
based on which decisions is drawn whether to invest in the project or not. It takes into
consideration estimated income from the project (Nawaiseh and et.al, 2017). If the NPV is
positive it means that it is profitable to invest in the project and in the other case, it is not
feasible for the company to proceed with the project.
Project A
Computation of NPV
Year Cash inflows
PV factor
@ 11%
Discounted
cash
inflows
1 28000 0.901 25225.2
2 32000 0.812 25972
3 35000 0.731 25592
4 55000 0.659 36230
5 78000 0.593 46289
Total discounted cash
inflow 159308
Initial investment 100000
NPV (Total
discounted cash
inflows - initial
investment) 59308
Project B