Write an essay on business decision making

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Reference no: EM133857796

TASK DESCRIPTION: Assignment

Bright Energy Ltd is an electronics manufacturing company based in the UK that specialises in innovative energy solutions. Due to previous outsourcing of key product lines, the management is now considering whether to insource production for one of two projects: LED Displays or Smart Energy Meters. After receiving various proposals, the management has shortlisted two projects for evaluation. Hire best assignment help service online!

Project X (LED Displays): Initial Investment: £90,000
Project Y (Smart Energy Meters): Initial Investment: £95,000

The required discount rate for the company is 12%. The net cash flows over the next 5 years for both projects are provided in the table below:

Year Project X: LED Displays (Net Cash Project Y: Smart Energy Meters (Net Cash Flow £) Flow £)

1   22,000   20,000
2   27,000   28,000
3   34,000   38,000
4   40,000   42,000
5   75,000   90,000

You are required to write an essay on business decision making, comparing the key aspects of the payback period and Net Present Value (NPV) techniques. In your essay, you are also required to calculate the payback period and NPV for the proposed projects, and discuss the financial and nonfinancial factors that should be considered when making investment decisions.

Reference no: EM133857796

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