Foundation Degree in Business and Management

Foundation Degree in Business and Management (Year 2)
Business Finance (BMS512)
Title: Business Report
Words: 2870
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Introduction......................................................................................................................................4
Task A Table of Contents
.........................................................................................................................................................5
a) Payback Period for All Projects...............................................................................................5
b) Net Present Value for All Projects..........................................................................................5
c) Ranking the Projects Using PBP and NPV Values.................................................................6
d) The Selection of the Appropriate Project for Investment Decision (Mutually Exclusive).....6
e) Discussing Strengths and Weaknesses of PBP and NPV Methods for Investment Appraisal 7
Payback Period........................................................................................................................7
Net Present Value........................................................................................................................7
f) Five Qualitative Factors for Directors Before Making Investment Decision..........................8
Task B..............................................................................................................................................9
a) Suggesting Three Alternative Methods of Funding for K Plc.................................................9
b) Link between the above Financing Decision and Investment Decision..................................9
Task C............................................................................................................................................10
a) Preparing a Variance Analysis Statement of The Variable Cost Elements...........................10
b) Suggesting Possible Explanations for the Variances Identified............................................11
Task D............................................................................................................................................12
Distinguishing between Centralised and Decentralised Procurement.......................................12
Benefits of Centralised and Decentralised Purchasing..............................................................13
Conclusion.....................................................................................................................................15
References......................................................................................................................................16
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Table of Figures
Figure 1: Payback Period for all Projects (source: self-calculated).................................................5
Figure 2: Net Present Value for All Projects (Source: self-calculated)...........................................5
Figure 3: Variance Analysis for K plc (source: self-included)......................................................11
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Introduction
The business report will be evaluated in light of various financial techniques, including
investment appraisals from several projects. Among seven investment projects, the PBP and
NPV methodologies will be utilised to identify which investment project is the most suited for
the investors. Projects A and G, which are the ideal projects for investment in K Plc, are among
the most promising. In addition, the variance analysis for K Plc is addressed in the evaluation,
with the majority of the variance analysis, such as materials, labour, and variable overhead,
requiring more control and oversight from the management. Along with the necessity of
centralised procurement, decentralised procurement will be covered for the organisation. There
are various benefits to centralised and decentralised buying, which every company organisation
should examine before adopting a procurement management option.
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