Learning Outcomes:
LO1: Demonstrate knowledge and understanding of key decision theories and principles and interpret different approaches to business decision-making processes.
LO3: Evaluate and interpret results generated by data modeling and forecasting techniques, including those provided by specialized statistical computer software
LO5: Apply, and demonstrate an understanding of, relevant management science techniques.
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Do You Need Assignment of This Question
ABA plc is a branded cycle company, operating in the UK and some parts of Europe. Currently, some of their productions such as electric cycles and electric scooters have been outsourced due to a lack of available resources. However, strategic managers of ABA plc are looking to invest in a project manufacturing electric cycles or electric scooters. They have called new business proposals and have finally, chosen two projects using managers’ discretion to make the final decisions. The initial investment required for project A (electric cycles) is £140,000 and for project B (electric scooters) is £180,000. The discount rate required is 16%. The net cash flows for two projects can be summarized as below:
You are required to write an essay on business decision-making, comparing the key aspects of the tools like the payback period and NPV, and financial and non-financial factors used to aid decision making.
Year
Project A – Electric Cycles Project
Net cashflow £
Project B –Electric Scooters Project
Net cashflow £
1
35,000
46,000
2
40,000
55,000
3
45,000
60,000
4
80,000
80,000
5
92,000
100,000
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