Business Decision Making
TASK
DD plc is a vegetarian food manufacturing company, operating in the UK and some parts of the Europe. Currently, some of their productions such as smoothies and non-diary milk have been outsourced due to lack of available resources. However, strategic managers of DD plc are looking to invest in a project producing smoothies or non-diary milk. They have called new business proposals and have finally, chosen two projects using managers’ discretion to make final decision. Initial investment required for project A (smoothies) is £158,000 and for project B (non-diary milk) is £155,000. The discount rate required is at 15%.
The net cash flows for two projects can be summarized as below:
Year Project A – Smoothies Project B –Non-Diary Milk
Net cashflow £ Net cashflow £
1 72,000 71,000
2 78,000 73,000
3 82,000 97,000
4 110,000 118,000
5 125,000 121,000
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.
1000 words maximum.
FORMATTING AND LAYOUT
Note the following when completing your written assignment:
⦁ Writing: Written in English in an appropriate business/academic style
⦁ Focus: Focus only on the tasks set in the assignment.
⦁ Ensure a clear title, course, and name or ID number is on a cover sheet and a bibliography using Harvard referencing throughout is also provided.
⦁ Research: Research should use reliable and relevant sources of information e.g. academic books and journals that have been peer reviewed. The research should be extensive.
⦁ All referencing should be in Harvard style.
