Write a report to the senior management of the company explaining how each of the techniques works

INSTRUCTIONS TO CANDIDATES

ANSWER ALL QUESTIONS

Business Decision Making

Senior management at Dolapo Plc have identified that there is a strategic need for a replacement machine to be acquired in one of its production departments. They have to make a choice between two models of the machine they have in mind. Model 1 is called Dysn and model 2 is called Texla. They are unsure as to which of the two models they should buy. They have given you the following profiles of the two models.

Cash flow (£)
Period	Dysn: Model 1	Texla: Model 2
Year0	(£250,000)	(400000)
1	120,000	95000
2	90,000	125000
3	75,000	115000
4	80,000	125000
Scrap Value	10,000	90000
Cost of Capital	12%

QUESTION 1(a) :

 They want you to appraise the two prospective projects using the following investment appraisal techniques:                                                                                                [46 MARKS]

(i)   Payback (8marks)

(ii)  Accounting rate of Return (10 marks)

(iii)  Net Present Value (12 marks)

(iv)  Internal Rate of Return (16 marks)

Note: Funds are only available for only one model.

QUESTION 1(b) :

Write a report (of around 500 words) to the senior management of the company explaining how each of the techniques works. Your report should include the advantages and disadvantages of each technique.                                                                 

QUESTION 1(c) :

 

Explain briefly (in around 200 words) which machine you would recommend to senior management of Dolapo Plc under each technique and state your reason why you would recommend that machine. 

Attachments:

Related Questions

. The fundamental operations of create, read, update, and delete (CRUD) in either Python or Java

CS 340 Milestone One Guidelines and Rubric  Overview: For this assignment, you will implement the fundamental operations of create, read, update,

. Develop a program to emulate a purchase transaction at a retail store. This  program will have two classes, a LineItem class and a Transaction class

Retail Transaction Programming Project  Project Requirements:  Develop a program to emulate a purchase transaction at a retail store. This

. The following program contains five errors. Identify the errors and fix them

7COM1028   Secure Systems Programming   Referral Coursework: Secure

. Accepts the following from a user: Item Name Item Quantity Item Price Allows the user to create a file to store the sales receipt contents

Create a GUI program that:Accepts the following from a user:Item NameItem QuantityItem PriceAllows the user to create a file to store the sales receip

. The final project will encompass developing a web service using a software stack and implementing an industry-standard interface. Regardless of whether you choose to pursue application development goals as a pure developer or as a software engineer

CS 340 Final Project Guidelines and Rubric  Overview The final project will encompass developing a web service using a software stack and impleme