UC知道投资评价
来源：百度知道 编辑：UC知道 时间：2024/06/06 17:56:47
Task 3
The Directors are considering two alternative business projects each of which involve an initial investment of ₤ 450,000. In your role as financial consultant you are asked to advise the Directors which of the two projects would be the more financially viable.
Project ‘A’ involves the introduction of modern, hi-tech machinery into the company’s main production unit. This will result in significant increases in output and substantial savings in production and maintenance costs. This in turn will result in a net increase in turnover to the company of:-
Year 1 - ₤ 180,000
Year 2 - ₤ 230,000
Year 3 - ₤ 280,000
Year 4 - ₤ 120,000
Project ‘B’ involves an increase in the company’s marketing activities. The Directors would employ one of the region’s most prestigious marketing companies to manage a massive national campaign. They feel that business could be increased without, necessarily
The Directors are considering two alternative business projects each of which involve an initial investment of ₤ 450,000. In your role as financial consultant you are asked to advise the Directors which of the two projects would be the more financially viable.
Project ‘A’ involves the introduction of modern, hi-tech machinery into the company’s main production unit. This will result in significant increases in output and substantial savings in production and maintenance costs. This in turn will result in a net increase in turnover to the company of:-
Year 1 - ₤ 180,000
Year 2 - ₤ 230,000
Year 3 - ₤ 280,000
Year 4 - ₤ 120,000
Project ‘B’ involves an increase in the company’s marketing activities. The Directors would employ one of the region’s most prestigious marketing companies to manage a massive national campaign. They feel that business could be increased without, necessarily
Payback period:
Project ‘A’:2.14 year
Project ‘B’:3.08 year
Discounted Payback period:
Project ‘A’:2.32 year
Project ‘B’:3.38 year
Accounting rate of return:
Project ‘A’:90%
Project ‘B’:75.56%
NPV:
Project ‘A’:254,655
Project ‘B’:121,331
IRR:
Project ‘A’:29.20%
Project ‘B’:15.02%
The above results demonstrates that project A is better, but A and B should be adopted if fund is not a problem.