Investment Opportunities for ALLCURE INC. - Feasibility Study

Analysis of
Investment
opportunities for
ALLCURE INC.

Executive Summary
In the said report, there has been analysis of investment proposal at the disposal of
ALLCURE Inc. The two proposals has been analysed based on quantitative and
qualitative parameter to understand the feasibility of project on financial, social and
other areas. The quantitative parameter of analysing the project has been highlighted
here in below:
(a) Net Present Value;
(b) Profitability Index;
(c) Internal Rate of Return;
(d) Discounted Payback Period
Further, the parameters for analysing qualitative aspect of the project includes
litigation, penalty & moral impact of the project on the future prospect of the
company.
On the basis of above analysis, it has been understood that P-REC is feasible on
quantitative front while T-REC is feasible on qualitative front and hence a
conservative view has been taken to safeguard the future interest of the company by
choosing proposal T-REC and further testing P-REC before official launch.

Table Of Contents:
Executive Summary..........................................................................2
Introduction......................................................................................4
Findings............................................................................................4
4.1 Quantitative Findings on the basis (P-REC & T-REC)..............4
Discounted Payback period:........................................................5
Net Present Value:......................................................................5
Internal Rate of Return:..............................................................5
Profitability Index........................................................................5
4.2 Qualitative Findings...............................................................7
Recommendation and Justifications.................................................7
Detail Comparison and Further Recommendation...........................7
Conclusion........................................................................................8
References........................................................................................8
Appendix-1.......................................................................................9

Introduction
ALL Cure Inc. has incurred expenditure on Research and development of medicine for
years and is now proposing to explore two revenue earning opportunities i.e. T-REC
and P-REC. The analysis in this report deals with feasibility study of the aforesaid
project based on quantitative and qualitative parameters. Further, P- REC has side
impact and shall result in long term disease while T –REC is much more stable>
Findings
4.1 Quantitative Findings on the basis (P-REC & T-REC)
The assumptions that have been undertaken for carrying out the analysis presented in
the Appendix of the report have been highlighted here in under:
(a) Expenses incurred in training human resource has been treated as capital
expenditure which is non –depreciable and no tax deduction shall be available on
the same;
(b) The life of both the proposal is 8 years and the assets are assumed to be disposed
at the end of eight years;
(c) The cost incurred towards renovation is treated as Capital Expenditure and the
same is tax depreciable for analysis purpose.
(d) Any loss or gain on disposal of asset after completion of 8 years has been taken
into consideration for analysis;
(e) Realisation of Working capital on completion of project;
(f) Expenditure incurred on Research and Development has been considered as sunk
cost and not tax deductible.
The quantitative analysis has been carried on four parameters. The parameter chosen
for analysis has been enumerated here-in-under:
Discounted Payback period:
This capital budgeting tool analyse the time period to breakeven the investment made
initially while recognising the concept of time value of money. Further, in layman
terms it means that time period which shall be required by the company to recollect
the initial outlay made by discounting the cash flows to present value. (Anon., 2018)
Net Present Value:
It is a significant methods under capital budgeting under it the discounted cash flow
computed is reduced by initial outlay to understand the feasibility of the project. If the
said computation is positive, the project is feasible and if negative, the project shall