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Feasibility of Investment Proposals for DDK plc

   

Added on  2022-12-14

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ESSAY
Feasibility of Investment Proposals for DDK plc_1

TABLE OF CONTENTS
INTRODUCTION......................................................................................................................3
Evaluating the feasibility of investment proposals for DDK plc...........................................3
Different factors to be considers at the time of making financial decision............................6
CONCLUSION..........................................................................................................................7
REFERENCES...........................................................................................................................8
Feasibility of Investment Proposals for DDK plc_2

INTRODUCTION
The business decision making process basically considered as an important part of a
business entity which assist in attaining the desired goals and objectives in a better way. This
essay is based on DDK plc which is a textile company having operations in the UK and other
parts of the Europe. This essay states about the various investment appraisal techniques
which can be used by the company in the process of undertaking investment related
decisions. In also covers various financial and non-financial factors affecting the decision.
Evaluating the feasibility of investment proposals for DDK plc
As per the situation, there are two projects in which the company is looking for the
investment and can invest in only one project. Thus, NPV and payback period investment
appraisal techniques are used for evaluating the proposals.
Net present value
The NPV approach is widely used as it involves converting the future expected cash
flows into present value from which cash outflow of the project is deducted (Harris, Hoang
and Ngan, 2017). This approach is useful in determining the productivity in respect to the
project.
Project A– Belt Project
Computation of NPV
Year Cash
inflows
PV factor @
14%
Discounted cash
inflows
1 45000 0.877 39473.68
2 45000 0.769 34626.04
3 35000 0.675 23624.00
4 70000 0.592 41445.62
5 82000 0.519 42588.23
Total discounted cash inflow 181757.58
Initial investment 170000.00
NPV (Total discounted cash inflows - 11757.58
Feasibility of Investment Proposals for DDK plc_3

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