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Accounting Assignment (Doc)

   

Added on  2020-05-16

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Running head: ACCOUNTINGAccountingName of the Student:Name of the University:Authors Note:
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ACCOUNTING1Table of Contents1. Carrying out full investigation on investment on both projects, which includes paybackperiod, average rate of return and net present value:.................................................................22. Conducting breakeven analysis for the project and using the result in the assessment:........33. Analysing both quantitative and qualitative data for both the projects:.................................54. Making adequate judgement based on justification stating, which project could be chosen:6Reference and Bibliography:......................................................................................................7
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ACCOUNTING21. Carrying out full investigation on investment on both projects, which includespayback period, average rate of return and net present value:Option A: BirminghamParticularsCash inCash outDiscount factor 8%Cash flowCum-cash flowInitial investment100,000 1.00 (100,000) (100,000)Year 1 50,000 32,500 0.93 17,500 (82,500)Year 2 70,000 45,500 0.86 24,500 (58,000)Year 3 150,000 97,500 0.79 52,500 (5,500)Year 4 150,000 97,500 0.74 52,500 47,000 Year 5 150,000 97,500 0.68 52,500 99,500 Payback period3.10ARR19.90%Net present value53,204.38 The overall evaluation of investment appraisal techniques relevantly helps inidentifying the viability of new project, which could in turn help in generating higher revenuein long run. In addition, the payback period of Option A situated in Birmingham is mainly atthe levels of 3.1 years. Moreover, the accounting rate of return is at the levels of 19.90%,which is identifying adequate profitability generated from operations (Baum and Crosby2014). Lastly, the overall net present value of the project is mainly at the levels of$53,204.38. This could eventually help in generating higher revenue from investment. Option B: LondonParticularsCash inCash outDiscount factor 8%Cash flowCum-cash flowInitial investment 175,000 1.00 (175,000) (175,000)Year 1 50,000 32,500 0.93 17,500 (157,500)Year 2 100,000 65,000 0.86 35,000 (122,500)Year 3 250,000 162,500 0.79 87,500 (35,000)Year 4 250,000 162,500 0.74 87,500 52,500 Year 5 250,000 162,500 0.68 87,500 140,000 Payback period3.40ARR16.00%Net present value64,537.03
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