Investment Appraisal Techniques and Financial Ratios Analysis for Jessica Ltd

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Table of Contents
INTRODUCTION...........................................................................................................................3
Main Body.......................................................................................................................................3
A) Calculate the Investment appraisal technique for the Project 1........................................3
(i) Calculate payback period...................................................................................................3
(ii) Calculation of NPV..........................................................................................................4
(iii) Calculation of Internal Rate of Return............................................................................4
b) Complete the financial statements.....................................................................................6
(i) Calculate the following ratios............................................................................................6
(ii) Explain and evaluate the non-financial factors that can be used in evolution of omega
limited.....................................................................................................................................7
(iii) Analysis the influence of the Pricing strategy on the company TESCO.........................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
The capital investment in any organisation means to invest money in any project or assets
with the aim to get an efficient return on the capital. It is done to maintain the profitability of the
business and for its expansion also. For this the budget is prepared and the cash inflows and
outlay are estimated to calculated the investment returns on the capital. Also the ratios can be
determined and the financial health of the company can be known (Alkaraan, 2020). This report
consists of capital investment methods for analysing the suitability of the project in which the
company Jessica Ltd is going to invest. Further, the Ratios of the organisation Omega Ltd. has
been calculated to evaluate the performance of the company. Also the non – fiscal indicators are
explained which can be used to accessed the performance of the corporation. Moreover, the
pricing strategy of the organisation Tesco is discussed at the end.
Main Body
A) Calculate the Investment appraisal technique for the Project 1.
(i) Calculate payback period.
Year Cash Inflow (£) Cumulative Cash Inflow (£)
1 150000 150000
2 180000 330000
3 140000 470000
4 110000 580000
5 150000 730000
6 100000 830000
Payback period = Years before fully recovery + Uncovered amount / Cash inflow during the
year.
= 3 + 80000/110000
= 3 + 0.73
= 3.73 years.