Transport Investment Appraisal Methods

This assignment focuses on the diverse methodologies employed in evaluating the financial viability and overall impact of transport infrastructure projects. Students are expected to delve into both traditional and contemporary approaches to transport appraisal, considering factors such as cost-benefit analysis, discounted cash flow, and sustainability assessments. The emphasis is on understanding the strengths and limitations of different methods and their application in real-world scenarios.

1
FINANCE FOR BUSINESS – MASTERS
Finance for business – Masters
Name of the Student:
Name of the University:
Authors Note:

2
FINANCE FOR BUSINESS – MASTERS
Table of Contents
1. Detecting the relevant accounts that need to be omitted from the list of Exhibit 3:..............3
2. Mentioning the calculation for the incremental cash flow table for most likely situation:....3
3. Calculating the NPV, internal rate of return (IRR) and profitability index (PI) for the
overall project:...........................................................................................................................5
4. Portraying the sensitivity analysis for best case and worst case scenario mentioned in
exhibit 1:.....................................................................................................................................6
5. Calculating the expected sales, standard deviation and coefficient variance from different
situations:.................................................................................................................................10
6. Increasing the annual sales by minimal value:.....................................................................10
7. Mentioning the reason behind using high discount rate when the inflation rate is at 3%:. .17
8. Mentioning the recommendation for the production of 10-in and 12-in Pipe to the
organisation:.............................................................................................................................18
Reference and Bibliography:....................................................................................................19

3
FINANCE FOR BUSINESS – MASTERS
1. Detecting the relevant accounts that need to be omitted from the list of Exhibit 3:
The evaluation of the overall case study and exhibit 3 mainly helps in identifying the
relevant accounts, which could be excluded from the list, as they serve no purpose. This
exclusion of the expenses account could actually help in identifying the actual value of the
project. Furthermore, indirect expense and space account is mainly excluded from the exhibit
3, which could help in identifying the actual benefits that could be provided from the project.
The relevant indirect expenses mainly accounts for supervisor salary, which needs to be
provided for the project. However, evaluation of the overall case study mainly helps in
identifying that no separate supervisor salary needs to be conducted for only this project, as
the existing supervisor will monitor during project. This will not increase the burden on the
current supervisor, as depicted in the case study, which will help in reducing the overall cost
of the project. Nevertheless, the relevant expenses of space need not be conducted by the
company for this particular project, as it is depicted in the case study that the empty space in
the current premises will be used for the project. Therefore, no rent or any kind of expenses
needs to be included for the current project. Hence, both indirect expenses and space
expenses can be excluded from exhibit 3 for deriving the actual value of the project. In this
context, Aggarwal & Thakur (2013) stated that evaluation of the overall project mainly helps
in identifying the relevant expenses that needs to be conducted for smoothly operating and
identifying the adequate net profit generated from operations.
2. Mentioning the calculation for the incremental cash flow table for most likely
situation:
Particulars 0 1 2 3 4 5 6 7 8
Initial
investment
$
1,000,0
00
Unit selling
price
0.56 0.58 0.59 0.61 0.63 0.65 0.67 0.69
Annual
sales
1,
650,00
0
1,
699,50
0
1,7
50,48
5
1,8
03,00
0
1,8
57,09
0
1,9
12,80
2
1,9
70,18
6
2,0
29,29
2
Revenue 1,0 1,1 1,1 1,2 1,3 1,3

4
FINANCE FOR BUSINESS – MASTERS
924,00
0
980,27
2
39,97
0
03,30
4
70,49
6
41,77
9
17,40
3
97,63
3
Raw
materials
$544,5
00
$560,8
35
$577,
660
$594,
990
$612,
840
$631,
225
$650,
161
$669,
666
Distribution
cost
$33,00
0 33,990 35,01
0
36,06
0
37,14
2
38,25
6
39,40
4
40,58
6
Direct
labour
$40,00
0 41,200 42,43
6
43,70
9
45,02
0
46,37
1
47,76
2
49,19
5
On costs $11,52
0 11,866 12,22
2
12,58
8
12,96
6
13,35
5
13,75
5
14,16
8
Utilities $8,000
8,240 8,487 8,742 9,004 9,274 9,552 9,839
Repairs and
Maintenanc
e
$7,000
7,210 7,426 7,649 7,879 8,115 8,358 8,609
General
factory
$18,00
0 18,540 19,09
6
19,66
9
20,25
9
20,86
7
21,49
3
22,13
8
Depreciatio
n
$
143,00
0
235,00
0
1
62,00
0
1
15,00
0
89,00
0
89,00
0
89,00
0
46,00
0
Lost
interest
$120,0
00 123,60
0
1
27,30
8
1
31,12
7
1
35,06
1
1
39,11
3
1
43,28
6
147,5
85
TOTAL $925,0
20
$1,040,
481
$991,
645
$969,
534
$969,
170
$995,
576
$1,02
2,773
$1,00
7,786
salvage
value
$
150,0
00

5
FINANCE FOR BUSINESS – MASTERS
PBT
(1,020) (60,209
)
48,32
5
1
33,77
0
2
01,32
5
2
46,20
3
2
94,63
0
539,8
47
Tax
- - 14,49
8
40,13
1
60,39
8
73,86
1
88,38
9
161,9
54
PAT
(1,020) (60,209
)
33,82
8
93,63
9
1
40,92
8
1
72,34
2
2
06,24
1
377,8
93
Net Cash
flow
$
(1,000,
000)
141,98
0
174,79
1
1
95,82
8
2
08,63
9
2
29,92
8
2
61,34
2
2
95,24
1
423,8
93
3. Calculating the NPV, internal rate of return (IRR) and profitability index (PI) for the
overall project:
Particular
s
Year 0 Year 1 Year 2 Year
3
Year
4
Year
5
Year
6
Year
7
Year
8
Net Cash
flow
$
(1,000,
000)
141,980 174,791
1
95,82
8
2
08,63
9
2
29,92
8
2
61,34
2
2
95,24
1
4
23,893
Cumulativ
e cash
flow
$
(1,000,
000)
(
858,020
)
(
683,229
)
(4
87,40
1)
(27
8,762
)
(4
8,835
)
2
12,50
7
5
07,74
9
9
31,641
NPV $202,7
01.90
IRR 14%
Payback
period
5.2
Profitabilit
y index
1.20
The evaluation of a case study directly indicates the payback period of 5 years is
mainly needed by the organisation from the project to allow it as feasible. However, the

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FINANCE FOR BUSINESS – MASTERS
overall project has a payback period of 5.2 years, which is a relatively higher than the actual
criteria of the organisation. This non-fulfilment of the specific payback period could directly
force the organisation to reject the overall project. Nevertheless, the profitability index
directly indicates a value of 1.20, which directly states relevant profits that could be incurred
from the project. Moreover, the NPV of the project is $202,701.90, while the IRR is 14%,
which directly indicates the overall viability of the project. Awojobi & Jenkins (2016) stated
that use of adequate investment appraisal techniques could eventually allow the organisation
to identify the relevant viability of the investment and the adequate returns which could be
provided after completion of the project.
4. Portraying the sensitivity analysis for best case and worst case scenario mentioned in
exhibit 1:
Worst Case Scenario
Particulars 0 1 2 3 4 5 6 7 8
Initial
investment
$
1,000,0
00
Unit selling
price
0.56 0.58 0.59 0.61 0.63 0.65 0.67 0.69
Annual
sales
1,
350,00
0
1,
390,50
0
1,4
32,21
5
1,4
75,18
1
1,5
19,43
7
1,5
65,02
0
1,6
11,97
1
1,6
60,33
0
Revenue
756,00
0
802,04
0
8
50,88
5
9
02,70
4
9
57,67
8
1,0
16,00
1
1,0
77,87
5
1,1
43,51
8
Raw
materials
$445,5
00
$458,8
65
$472,
631
$486,
810
$501,
414
$516,
457
$531,
950
$547,
909
Distribution
cost
$33,00
0 33,990 35,01
0
36,06
0
37,14
2
38,25
6
39,40
4
40,58
6
Direct
labour
$40,00
0 41,200 42,43 43,70 45,02 46,37 47,76 49,19

7
FINANCE FOR BUSINESS – MASTERS
6 9 0 1 2 5
On costs $11,52
0 11,866 12,22
2
12,58
8
12,96
6
13,35
5
13,75
5
14,16
8
Utilities $8,000
8,240 8,487 8,742 9,004 9,274 9,552 9,839
Repairs and
Maintenanc
e
$7,000
7,210 7,426 7,649 7,879 8,115 8,358 8,609
General
factory
$18,00
0 18,540 19,09
6
19,66
9
20,25
9
20,86
7
21,49
3
22,13
8
Depreciatio
n
$
143,00
0
235,00
0
1
62,00
0
1
15,00
0
89,00
0
89,00
0
89,00
0
46,00
0
Lost
interest
$120,0
00 123,60
0
1
27,30
8
1
31,12
7
1
35,06
1
1
39,11
3
1
43,28
6
147,5
85
TOTAL $826,0
20
$938,5
11
$886,
616
$861,
354
$857,
745
$880,
807
$904,
562
$886,
028
salvage
value
$
150,0
00
PBT
(70,020
)
(
136,47
0)
(
35,73
1)
41,34
9
99,93
3
1
35,19
3
1
73,31
4
407,4
89
Tax
- -
(
10,71
9)
12,40
5
29,98
0
40,55
8
51,99
4
122,2
47
PAT
(70,020
)
(
136,47
0)
(
25,01
2)
28,94
4
69,95
3
94,63
5
1
21,32
0
285,2
43
Net Cash $ 1 1 1 1 2

8
FINANCE FOR BUSINESS – MASTERS
flow (1,000,0
00)
72,980 98,530 36,98
8
43,94
4
58,95
3
83,63
5
10,32
0
331,2
43
Cumulative
cash flow
$
(1,000,0
00)
(
927,02
0)
(
828,49
0)
(6
91,50
2)
(54
7,558
)
(38
8,604
)
(20
4,969
)
5,350 336,5
93
NPV ($186,1
78.69)
IRR 6%
Payback
period 7.0
profitability
index 0.81
Best Case Scenario
Particulars 0 1 2 3 4 5 6 7 8
Initial
investment
$
1,000,
000
Unit selling
price
0.56 0.58 0.59 0.61 0.63 0.65 0.67 0.69
Annual sales 2
,250,0
00
2
,317,5
00
2,3
87,02
5
2,45
8,636
2,53
2,395
2,60
8,367
2,68
6,618
2,7
67,21
6
Revenue 1
,260,0
00
1
,336,7
34
1,4
18,14
1
1,50
4,506
1,59
6,130
1,69
3,335
1,79
6,459
1,9
05,86
3
Raw
materials
$742,5
00
$764,7
75
$787,
718
$811,
350
$835,
690
$860,
761
$886,
584
$913,
181
Distribution
cost
$33,00
0 33,990 35,01
0
36,06
0
37,14
2
38,25
6
39,40
4
40,58
6
Direct labour $40,00

9
FINANCE FOR BUSINESS – MASTERS
0 41,200 42,43
6
43,70
9
45,02
0
46,37
1
47,76
2
49,19
5
On costs $11,52
0 11,866 12,22
2
12,58
8
12,96
6
13,35
5
13,75
5
14,16
8
Utilities $8,000
8,240 8,487 8,742 9,004 9,274 9,552 9,839
Repairs and
Maintenance
$7,000
7,210 7,426 7,649 7,879 8,115 8,358 8,609
General
factory
$18,00
0 18,540 19,09
6
19,66
9
20,25
9
20,86
7
21,49
3
22,13
8
Depreciation $
143,00
0
235,00
0
1
62,00
0
11
5,000 89,00
0
89,00
0
89,00
0
46,00
0
Lost interest $120,0
00 123,60
0
1
27,30
8
13
1,127
13
5,061
13
9,113
14
3,286 147,5
85
TOTAL $1,123
,020
$1,244
,421
$1,20
1,703
$1,18
5,894
$1,19
2,021
$1,22
5,112
$1,25
9,195
$1,25
1,301
salvage value $
150,0
00
PBT
136,98
0
92,313
2
16,43
8
31
8,612
40
4,109
46
8,223
53
7,264 804,5
62
Tax
- - 64,93
1
95,58
3
12
1,233
14
0,467
16
1,179 241,3
69
PAT
136,98
0
92,313
1
51,50
7
22
3,028
28
2,876
32
7,756
37
6,085 563,1
93
Net Cash $ 3 33 37 41 46

10
FINANCE FOR BUSINESS – MASTERS
flow (1,000,
000)
279,98
0
327,31
3
13,50
7
8,028 1,876 6,756 5,085 609,1
93
Cumulative
cash flow
$
(1,000,
000)
(720,0
20)
(
392,70
7)
(
79,20
0)
25
8,828
63
0,704
1,04
7,460
1,51
2,545
2,1
21,73
8
NPV $980,4
63.07
IRR 30%
Payback
period
3.2
profitability
index
1.98
5. Calculating the expected sales, standard deviation and coefficient variance from
different situations:
Particulars NPV Probability
Worst case ($186,178.69) 0.1
Most likely $202,701.90 0.6
Best case $980,463.07 0.3
Expected NPV $397,142.19
Standard deviation of NPV $ 398,484.02
Coefficient of variation of NPV 1.0034
6. Increasing the annual sales by minimal value:
Best Case
Inflation
rate
3%
minimum
increment
20%
Particulars 0 1 2 3 4 5 6 7 8
Initial
investment
$
1,000,0

11
FINANCE FOR BUSINESS – MASTERS
00
Unit selling
price
0.56
0.58 0.59 0.61 0.63 0.65 0.67 0.69
Annual sales
2,700,
000
2,781,
000
2,8
64,43
0
2,95
0,363
3,03
8,874
3,13
0,040
3,22
3,941
3,3
20,65
9
Revenue
1,512,
000
1,604,
081
1,7
01,76
9
1,80
5,407
1,91
5,356
2,03
2,002
2,15
5,750
2,2
87,03
6
Raw
materials
$891,
000
$917,
730
$945,
262
$973,
620
$1,00
2,828
$1,03
2,913
$1,06
3,901
$1,09
5,818
Distribution
cost
$39,6
00 40,78
8
42,01
2
43,27
2
44,57
0
45,90
7
47,28
4
48,70
3
Direct
labour
$40,0
00 41,20
0
42,43
6
43,70
9
45,02
0
46,37
1
47,76
2
49,19
5
On costs $11,5
20 11,86
6
12,22
2
12,58
8
12,96
6
13,35
5
13,75
5
14,16
8
Utilities $8,00
0 8,240 8,487 8,742 9,004 9,274 9,552 9,839
Repairs and
Maintenanc
e
$7,00
0 7,210 7,426 7,649 7,879 8,115 8,358 8,609
General
factory
$18,0
00 18,54
0
19,09
6
19,66
9
20,25
9
20,86
7
21,49
3
22,13
8
Depreciatio
n
$
143,0
00
235,0
00
1
62,00
0
11
5,000 89,00
0
89,00
0
89,00
0
46,00
0
Lost interest $120, 1 13 13 13 14

12
FINANCE FOR BUSINESS – MASTERS
000 123,6
00
27,30
8
1,127 5,061 9,113 3,286 147,5
85
TOTAL $1,27
8,120
$1,40
4,174
$1,36
6,249
$1,35
5,376
$1,36
6,588
$1,40
4,915
$1,44
4,393
$1,44
2,054
salvage
value
$
150,0
00
PBT
233,8
80
199,9
07
3
35,52
1
45
0,031
54
8,769
62
7,086
71
1,358 994,9
81
Tax
- -
1
00,65
6
13
5,009
16
4,631
18
8,126
21
3,407 298,4
94
PAT
233,8
80
199,9
07
2
34,86
4
31
5,022
38
4,138
43
8,960
49
7,950 696,4
87
Net Cash
flow
$
(1,000,
000)
376,8
80
434,9
07
3
96,86
4
43
0,022
47
3,138
52
7,960
58
6,950 742,4
87
Cumulative
cash flow
$
(1,000,
000)
(623,1
20)
(188,2
13)
2
08,65
2
63
8,673
1,11
1,811
1,63
9,772
2,22
6,722
2,9
69,20
9
NPV $1,340,
309.13
IRR 41%
Payback
period 2.5
profitability
index 2.34
Worst Case
Inflation rate 3%

13
FINANCE FOR BUSINESS – MASTERS
minimum
increment
20%
Particulars 0 1 2 3 4 5 6 7 8
Initial
investment
$
1,000,0
00
Unit selling
price
0.56
0.58 0.59 0.61 0.63 0.65 0.67 0.69
Annual sales 1
,620,0
00
1
,668,6
00
1,7
18,65
8
1,7
70,21
8
1,8
23,32
4
1,8
78,02
4
1,93
4,365
1,9
92,39
6
Revenue
907,20
0
962,44
8
1,0
21,06
2
1,0
83,24
4
1,1
49,21
4
1,2
19,20
1
1,29
3,450
1,3
72,22
1
Raw
materials
$534,6
00
$550,6
38
$567,
157
$584,
172
$601,
697
$619,
748
$638,
340
$657,
491
Distribution
cost
$39,60
0 40,788 42,01
2
43,27
2
44,57
0
45,90
7
47,28
4
48,70
3
Direct labour $40,00
0 41,200 42,43
6
43,70
9
45,02
0
46,37
1
47,76
2
49,19
5
On costs $11,52
0 11,866 12,22
2
12,58
8
12,96
6
13,35
5
13,75
5
14,16
8
Utilities $8,000
8,240 8,487 8,742 9,004 9,274 9,552 9,839
Repairs and
Maintenance
$7,000
7,210 7,426 7,649 7,879 8,115 8,358 8,609
General
factory
$18,00
0 18,540 19,09 19,66 20,25 20,86 21,49 22,13

14
FINANCE FOR BUSINESS – MASTERS
6 9 9 7 3 8
Depreciation $
143,00
0
235,00
0
162,0
00
1
15,00
0
89,00
0
89,00
0
89,00
0
46,00
0
Lost interest $120,0
00 123,60
0
127,3
08
1
31,12
7
1
35,06
1
1
39,11
3
14
3,286 147,5
85
TOTAL $921,7
20
$1,037
,082
$988,
144
$965,
928
$965,
456
$991,
750
$1,01
8,832
$1,00
3,727
salvage value $
150,0
00
PBT
(14,52
0)
(74,63
3)
32,91
8
1
17,31
6
1
83,75
8
2
27,45
1
27
4,618 518,4
94
Tax
- - 9,875 35,19
5
55,12
7
68,23
5
82,38
5
155,5
48
PAT
(14,52
0)
(74,63
3)
23,04
2
82,12
1
1
28,63
0
1
59,21
6
19
2,233 362,9
46
Net Cash
flow
$
(1,000,
000)
128,48
0
160,36
7
185,0
42
1
97,12
1
2
17,63
0
2
48,21
6
28
1,233 408,9
46
Cumulative
cash flow
$
(1,000,
000)
(
871,52
0)
(
711,15
3)
(5
26,11
1)
(32
8,990
)
(11
1,359
)
1
36,85
6
41
8,089 827,0
35
NPV $41,16
6.01
IRR 13%
Payback
period 5.4
profitability

15
FINANCE FOR BUSINESS – MASTERS
index 1.04
Most Likely
minimum
increment
20%
Inflation rate 3%
Particulars 0 1 2 3 4 5 6 7 8
Intial
investment
$
1,000,
000
Unit selling
price
0.56
0.58 0.59 0.61 0.63 0.65 0.67 0.69
Annual sales 1,98
0,000
2,03
9,400
2,10
0,582
2,16
3,599
2,22
8,507
2,29
5,363
2,36
4,224
2,43
5,150
Revenue 1,10
8,800
1,17
6,326
1,24
7,964
1,32
3,965
1,40
4,595
1,49
0,134
1,58
0,884
1,67
7,159
Raw
materials
$653,
400
$673,
002
$693,
192
$713,
988
$735,
407
$757,
470
$780,
194
$803,
600
Distribution
cost
$39,6
00 40,78
8
42,01
2
43,27
2
44,57
0
45,90
7
47,28
4
48,70
3
Direct labour $40,0
00 41,20
0
42,43
6
43,70
9
45,02
0
46,37
1
47,76
2
49,19
5
On costs $11,5
20 11,86
6
12,22
2
12,58
8
12,96
6
13,35
5
13,75
5
14,16
8
Utilities $8,00
0 8,240 8,487 8,742 9,004 9,274 9,552 9,839
Repairs and
Maintenance
$7,00
0 7,210 7,426 7,649 7,879 8,115 8,358 8,609

16
FINANCE FOR BUSINESS – MASTERS
General
factory
$18,0
00 18,54
0
19,09
6
19,66
9
20,25
9
20,86
7
21,49
3
22,13
8
Depreciation $
143,0
00
2
35,00
0
16
2,000
11
5,000 89,00
0
89,00
0
89,00
0
46,00
0
Lost interest $120,
000
1
23,60
0
12
7,308
13
1,127
13
5,061
13
9,113
1
43,28
6
1
47,58
5
TOTAL $1,04
0,520
$1,15
9,446
$1,11
4,179
$1,09
5,744
$1,09
9,167
$1,12
9,472
$1,16
0,686
$1,14
9,836
salvage value $
150,0
00
PBT
68,28
0
16,88
0
13
3,785
22
8,221
30
5,428
36
0,663
4
20,19
8
6
77,32
3
Tax
- - 40,13
6
68,46
6
91,62
8
10
8,199
1
26,05
9
2
03,19
7
PAT
68,28
0
16,88
0
93,65
0
15
9,755
21
3,800
25
2,464
2
94,13
8
4
74,12
6
Net Cash
flow
$
(1,000,
000)
21
1,280
2
51,88
0
25
5,650
27
4,755
30
2,800
34
1,464
3
83,13
8
5
20,12
6
Cumulative
cash flow
$
(1,000,
000)
(78
8,720)
(53
6,840)
(28
1,190)
(
6,435)
29
6,364
63
7,828
1,02
0,967
1,54
1,093
NPV $474,2
13.72
IRR 23%
Payback

17
FINANCE FOR BUSINESS – MASTERS
period 4.0
profitability
index 1.47
Particulars NPV
Worst case $41,166.01
Most likely $474,213.72
Best case $1,340,309.13
7. Mentioning the reason behind using high discount rate when the inflation rate is at
3%:
The relevant use of 12% cost of capital in question six could eventually help in
detecting the actual financial projection provided from the project. The main reason behind
using high discount rate is to detect whether the project could hold and provide adequate
returns even in unforeseen circumstances. The relevant use of high cost of capital could
eventually help in detecting the returns provided from the project. Bai, Dhavale & Sarkis
(2016) criticizes that companies that are not using adequate cost of capital could not
accommodate for rising inflation rate, which might nullify the returns provided from a
particular product. Moreover, the cost of capital could be raised from 13% to 15%, where
relevant increment in sales could be accommodated. The actual increment in sales is not
relevantly identified, where the high cost of capital could allow the organisation to
accommodate for the changes in increment of sales revenue. There is a constant inflation rate
of 3%, which is estimated by the organisation. Nevertheless, the rising sales revenue can only
be discounted by using higher discount rate, as it might help in supporting the in rising
inflation rate and detect viability of the project. Baum & Crosby (2014) mentioned that use of
adequate investment appraisal techniques could eventually allow the organisation to choose
viable projects for increasing their firm value. In addition, the high cost of capital is also used
in the evaluation for detecting whether the returns provided from the project could become
negative due to unforeseen circumstances.

18
FINANCE FOR BUSINESS – MASTERS
8. Mentioning the recommendation for the production of 10-in and 12-in Pipe to the
organisation:
From the evaluation of all the relevant calculation conducted above, it could be
identified that the overall project portrays a viable approach, which could help in generating
adequate revenue for the company. Moreover, the production of 10-in and 12-in Pipe is
actually feasible under all the three situations when sales revenue or increased by 20%. This
adequate increment in revenue could eventually help in generating the required returns which
could allow the organisation to increase their firm value in future. Nevertheless, the returns
provided directly indicate that the project is viable option for the company, which might help
in increasing both demand and revenue for the product. However, the evaluation of the
project under normal circumstances mainly supports only two situations most likely and best
case scenario, which provide adequate returns from investment. Moreover, the worst case
scenario provides the negative NPV, which indicates that the project will not be viable if
worst case scenario occurs (Bueno, Vassallo & Cheung, 2015). This could directly indicate
that relevant returns provided from the project can increase the risk and reduce return of the
company. Therefore under normal circumstances if the revenue does not increase after
producing 10-in and 12-in Pipe in the factory premises then the project has relevant risk from
investment. Adequate evaluation of it conducted the expected sales, standard deviation, and
Coefficient of variance is calculated. The relevant expected sales is $397,142.19 with a
standard deviation of $ 398,484.02 and Coefficient of variance of 1.0034.directly indicates
that the organisation could commence with the project, as it might provide higher returns
from investment.
Hence, from the evaluation of different calculations conducted in the above tables it
could be identified that overall project for producing 10-in and 12-in Pipe in the premises of
the organisation is a viable approach, which could provide higher returns from investment.
Moreover, the relevant production of 10-in and 12-in Pipe could also boost the current
products, which is being produced by the organisation. This could eventually help in boosting
the revenues of the total products produced by the organisation. Therefore, it is advisable for
organisation 2 comments with the current project, which might help any increasing its
customer base and revenue in future.

19
FINANCE FOR BUSINESS – MASTERS
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