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Investment Opportunities PDF

   

Added on  2020-10-04

8 Pages2073 Words120 Views
1.0 INTRODUCTIONPurposeIn the present case scenario, there are two kinds of the investments provided which haveto analyse for their viability. Further, key purpose of the present report is to evaluate both thegiven investment opportunities and identify that whether these will be profitable or not. Further,it helps to take effective decisions to Mark and Paul for making investment in new restaurant orgold coast.ScopeScope of the project is analysing the investments and on the basis of that taking profitabledecisions. Apart from this, it will support to Mark and Paul in order to make comparison amongtwo or more investments in an appropriate direction.LimitationsBasic drawback of the present project is related to the time-frame where in order toperform calculation of budgets more time required. In addition to this, at the time of computingnet present value of the project, it is not necessary that discounting factor will remain same. Ifmarket conditions change then Mark and Paul cannot generate computed returns on theinvestment made at initial. 2.0 Nature and Scope of InvestmentsThe action which is taken by an individual or entity in order to invest sum of money forthe motive of profit earning is known as an investment. There are wide range of aspects andalternatives available in the market for making effective and profitable investment. Further,scope as well as nature of this aspect are stated below:The investment sometimes provide higher return and sometimes gives negative return aswell (Upton and et.al., 2015).It helps to enhance economic conditions of the individual in case higher profit or returngenerated.In order to create broad understanding about different decisions rules to the investment itis the best approach.

Another scope and nature of this is for assessing and knowing about the better and badinvestments decisions rules.In order to determine different categories about the decisions rules with respect toinvestment.3.0 Investment Opportunity One BudgetsIn the first investment opportunity, a new restaurant is opened and for which somebudgeted information provided. On the basis of the given data basically three budget statementsare prepared which show that whether proposed investment will profitable for Mark and Paul ornot (Bogsnes, 2016). The budgets are like cash, sales and labour which are presented below:3.1 Sales BudgetSales BudgetMonthJune JulyAugustSeptemberSales Unit20000180001800022000Price of eachunit45454545Selling priceof meal900000810000810000990000Selling unit ofdrinks450000405000405000495000Price of eachunit6666Total sellingprice of drinks2700000243000024300002970000Total sales36000003240000324000039600003.2 Labour BudgetLabour BudgetParticulars /MonthJune JulyAugustSeptemberWorking hours6666 Cost per hour23232323Number of workers3333Days of working26262626

Overallexpenditures107641076410764107643.3 Cash BudgetCash BudgetMonthJuneJulyAugustSepBank Account80000000Cash incomesSales revenues3600000113400011340006930000Total cash receiptsor inflows1260000126000012600001260000Cash outflowsMachinery011000000Furniture03000000Vehicle04300000Utensils01800000Credit Produce00400000Credit Drinks0200090009000Labour expense01076400Owner drawing0100001000010000overhead cost5000500050005000Total cash outflows50002287646400024000Cash balance at the end of month$1,255,000 $905,236 $1,070,000 $6,906,000 3.4 Overview and Analysis of BudgetsOn the basis of the above all the budgets it has been analysed that, new restaurantinvestment will provide better return. When looking at the sales budget statement then it hasbeen found that, total revenue is increasing on consistent basis from the fist to fourth month(Sattari and et.al., 2016). At the initial month total sales will be worth of $1260000 whichreduces in next months and reached up to $1134000. On the other hand side, at the end of lastmonth revenue is at the highest position which is worth of $6930000. After considering suchinformation it can be stated that, new restaurant will provide benefits at the end of fourth month.

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