DuoLever Ltd: Evaluation of Recycling Options for Maximum Cash Flow

This finance report evaluates two recycling options for DuoLever Limited, a personal care product company, aiming to maximize net cash inflows from sachet waste recycling. The analysis employs Net Present Value (NPV) to compare in-house recycling with selling the product (Option 1) against licensing the patented recycling method to Clean World Ltd (Option 2). The report concludes that Option 2, licensing, yields a higher NPV and is the recommended choice. However, it also suggests exploring cheaper financing sources for Option 1, which would be the second best choice, and provides a detailed NPV calculation for both options, considering factors like sales, variable costs, fixed costs, opportunity costs, taxes, and discount rates. Furthermore, the report includes recommendations on further analysis, such as considering lease options for equipment and ignoring sunk costs, and emphasizes the importance of considering risk tolerance, customer demand, and the company's available resources before making a final decision. The report also emphasizes the significance of the sales forecast and the alternative use of resources and provides an excel spreadsheet for supporting calculations.