Business Decision Making

Bussines Decision Making

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Investment decision-making........................................................................................................3
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
Business decision-making is all about assessment in respect to analysis about company
should invest in a particular project or not. This report is based on the case study of A&B Plc in
respect to its investment decision-making. The organisation is a restaurant chain operating its
business in United Kingdom. This report is an assessment of company in respect to its
investment in projects. Henceforth, report would assess the investment decision-making
company has made in its projects.
MAIN BODY
Investment decision-making
The payback period method
Payback period method is an investment decision method that make assessment in respect
to the investment decision making of company. This method involves projected cash outflow and
inflow in the investment decision. The estimated cash inflow is compared with the estimated
cash outflow to assess the investment decision of company. This method make investment
decision-making on the basis of the estimated time needed to recover the overall investment in
project (Awais and et.al., 2016). The project that contain the least payback period time would be
a preferable choice for investment in this project. By comparing the total cash flows with the
initial level of investment in the project payback period is calculated in this method.
Project A- Dishwashing Project
Year Cash Inflow (£) Accumulated Cash Inflow (£)
1 30000 30000
2 35000 65000 (30000 + 35000)
3 40000 105000 (30000 + 35000 +
40000)
4 60000 165000 (30000 + 35000 +
40000 + 60000)
5 90000 255000 (30000 + 35000 +
40000 + 60000 + 90000)
Initial Investment = £120000