long-term supermarket projects, Financial Management

Assignment Help:

Here is currently making investment appraisals of two potential long-term supermarket projects, A and B. Both projects needs the similar initial investment of £20m. The following ratios have been calculated for the projects.

    Ratios                                                    Project A    Project B

    Payback period (years)                                5              6
    Accounting Rate of Return (ARR %)              15            18
    Net Present Value (NPV £m in 15 years)       120           145
    Internal Rate of Return (IRR %)                  16             14
    
You are needed to give recommendations to the directors for a choice of either project A or project B. Here is not able to undertake the above two projects at the same time or a mixed project of A and B.


Related Discussions:- long-term supermarket projects

Methods of easing cash shortages, Q. Methods of easing cash shortages? ...

Q. Methods of easing cash shortages? There are several techniques which can potentially offset the effects of cash shortages. In the long-term nevertheless the adequacy of cash

Caselet, Suggestion regarding credit limit. should it be approved or not, w...

Suggestion regarding credit limit. should it be approved or not, what should be the amount of credit limit that electronics give to booth plastics

Case study, credit limit decision bajaj electronics company

credit limit decision bajaj electronics company

Advent of euro affect international diversification strategy, Explain how t...

Explain how the advent of the euro would affect international diversification strategies. Answer: As the euro-zone will have similar exchange-rate policies and monetary, the co

Show the marketing issues, a) Cultural exports are the commercial transfer ...

a) Cultural exports are the commercial transfer of values and ideas from one country to another. Canned crab meat is a popular local fragility in Thailand and Viya Crab Products Co

Process of securitization, Steps involved in the Process of S...

Steps involved in the Process of Securitization The following are the major steps involved: The lender (also called the originator) - in th

Explain the determinants of operating exposure, Explain the determinants of...

Explain the determinants of operating exposure. Answer:  The main determinants of a company’s operating exposure are (a) The structure of the markets where the company sourc

What is translation risk, Q. What is Translation risk? This risk occurs...

Q. What is Translation risk? This risk occurs on consolidation of financial statements prior to reporting financial results and for this reason is as well known as accounting e

Capital market-secondary market, Secondary Market The secondary market ...

Secondary Market The secondary market is also referred to as the stock market where dealings in shares are taken up. It helps the shareholders to find buyers for trading. Thus,

Conversion parity price, We defined the conversion premium as the dif...

We defined the conversion premium as the difference between the market price of the convertible and the conversion value. The conversion premium ratio tells us ab

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd