This finance memo analyzes the financial implications of DuoLever Limited's decision to adopt sustainable packaging for its personal care products. The report evaluates two main options: establishing an in-house plant for recyclable packaging production versus outsourcing to a third party. The analysis includes detailed calculations of Net Present Value (NPV), Profitability Index Ratio, Internal Rate of Return (IRR), Payback Period, and Discounted Payback Period for both options under base, best-case, and worst-case scenarios. The memo highlights the uncertainties involved, such as sales fluctuations and investment risks, providing recommendations based on the financial data and environmental considerations. The findings suggest that while neither option yields significant profit, the company should consider the first option (setting up its own plant and machinery) to align with its sustainability goals despite the financial challenges.
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