Country : United Kingdom
Assignment Task


Q-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 decision. 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: 


Year Project A Electric Cycles Project Project B —Electric Scooters Project 
Net cashflow I I 35,000 46.000 2 40.000 55.000 3 45.000 60.000 4 80,000 80,000 5 92.000 100.000 
Q-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. 

 

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