BUSINESS

DECISION MAKING

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TABLE OF CONTENTS
INTRODUCTION..........................................................................................................................1
TASK 1...........................................................................................................................................2
1.1
1.1
1.1
1.2
1.2
1.2
1.2
1.3
TASK

Background..................................................................................................................... 2
Rationale.......................................................................................................................... 3
Objectives of the research........................................................................................ 3
Methodology................................................................................................................... 4
Data Analysis..................................................................................................................5
Time Frame..................................................................................................................... 6
Budget section............................................................................................................... 7
Questionnaire................................................................................................................. 8
2........................................................................................................................................ 11

2.1 & 2.2 Mean, Mode and Median..............................................................................11
2.3 Range and Standard Deviation............................................................................. 15
2.4 25th Percentile (Lower 25th Percentile (Lower Quartile) and 75th
Percentile (Upper Quartile) and use of Percentile................................................. 17
TASK 3........................................................................................................................................ 21
3.1 & 4.1 Produce line graph.........................................................................................21
Scatter Plot on Advertising costs and sales.............................................................25
3.2 & 4.1 Trend Lines....................................................................................................... 27
3.3 Business presentation.............................................................................................. 29
3.4 Formal Business Report........................................................................................... 29
TASK 4........................................................................................................................................ 32
4.2 Prepare a network diagram for activities using Microsoft Project........... 32
Calculate Project Duration..............................................................................................32
Clearly mark the Critical Path....................................................................................... 33
Prepare a Gantt chart and state the benefits of using it as a Project
Management Tool.............................................................................................................. 34
TASK 4 B.................................................................................................................................... 36
4.3 Calculation of Net present value and internal rate of return.................... 36
Recommendations.............................................................................................................41
CONCLUSION............................................................................................................................42
REFERENCE...............................................................................................................................43

INTRODUCTION
In the present business environment, every business entity determines
various strategies in order to take different management decisions with an
appropriate manner. The is because an efficient decision-making process
ensures the success of organization. By taking different strategic decisions
with

an

appropriate

manner,

management

can

improve

operational

capabilities and efficiency of business entity with reference to short and long
term business goals (Hofmann, 2007). In this process, management
examines several factors that are having direct impact on outcomes of
business decisions. It also supports management for selection of best
alternative from various options as per the distinct business requirement.
The present report is carried out detail evaluation of different case studies
and business scenarios and develops appropriate strategies to generate
appropriate outcomes. In this process, wide range of statistical tools and
techniques are applied for evaluation of distinct kind of data in order to take
appropriate decisions. In the context present study, this report also uses
different investment appraisal tactics through which an organization is able
to select best investment alternative for business expansion that would
increase profitability of company and reduces risk related to investment.

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TASK 1
1.1 Background
As per the given, it is found that Government of UK is planning to
initiate a Crossrail Project through which the public authority of UK will be
able to enhance the local transport connectivity within London. This project
will increase transportation facilities so as citizen would get quick and high
speed mode of transportation. The primary objective of this project is to offer
city transport facilities to more than 1.5 million. Furthermore, this project
provides significant support to public authorities in the form of employment,
leisure and other business operation. As per the case study, it is addressed
that the first cross-rail will be started from central London in late 2018 and
will carry more 200 million passenger annually. Furthermore, it will reduce
the journey time across London with the help of a high speed and affordable
mode of transportation.

The project cross-rail will be beneficial of public

authorities and local citizen because it will transform the rail transportation
and increase the capacity of public transport by 10%. Therefore, it can be
stated that success of the project is greatly depending on its timely
completion so as government authorities have to develop various strategies
and need to take appropriate management decision in order to keep the
project on the right track.
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1.1 Rationale
The primary objective this project is to enhance transportation services
to local citizen along with external so as people would get comfortable and
quick transportation facilities. In addition to that this project will be found
very effective in minimizing the road traffic through pollution level can be
controlled. It ensures safety of environment by lowering pollution level
(Lucey, 2005). Furthermore, the investigator is focusing on assessment of
the benefits of Crossrail project for the local community along with external
visitor. Therefore, the present investigation is carried out to evaluate several
factors of cross-rail project that assists researcher in facilitation of
appropriate and detail information about the benefits of the project of
government officials and managers of public authorities.
1.1 Objectives of the research
The primary objective of the present research is examining positive
aspect of the Cross Rail project for the local community of London. In
addition to that the present research is scheduled to evaluate the budget
and time frame associated with cross-rail project. The three main objective of
the present investigation are mentioned below:
To assess the positive outcomes of the project that would be assessed
by general public.
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To identify whether this project will provide significant benefits to
economy of London.
To evaluate the role of cross-rail project in completion of future
transportation requirement.

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1.2 Methodology
With reference to present given scenario, investigator requires to
assess wide range of information to generate appropriate and accurate
outcomes therefore researcher is applying both primary and secondary
information associated with the Crossrail project that would assist public
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authority in order to take appropriate business decisions for attainment
project goals. In this context, researcher has selected the random sampling
approach for selection of best sample through investigator would assess
appropriate information for public authorities (Hacklin and Wallnöfer, 2012).
For collection of first hand information, a sample of 50 local citizens will be
taken by researcher who will be affected from cross-rail project. Firstly,
qualitative techniques researcher will be found very effective to enhance the
understanding about the perception of local people towards particular
project that would helps researcher for generating appropriate research
outcomes as per the aim of present research. Along with this, using
quantitative techniques will be found very effective in evaluation of different
statistics along with numerical data (Nicholson and Aman, 2012). In primary
section, people of London will be provided questionnaire for assessment of
the perception of people about the project of cross-rail through which public
authorities are able to take appropriate decision associated with the project.
1.2 Data Analysis
In the present study, researcher will apply distinct tools for evaluation
of data that have been gained from distinct sources. In this context, thematic
and statistical approaches will be considered by researcher. However,
thematic analysis will provide significant assistance in evaluation of the
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subjective or qualitative that will be acquired in the form of primary data or
through questionnaire (Wallnöfer and Hacklin, 2012). On the other hand,
statistical approach will help investigation in order to interpret the numerical
information associated with budget and cost of project along with its benefits
to public authorities
1.2 Time Frame
Activities/

duration 2

4

6

8

10

12

14

16

in week
Analysing

the

situations
Determination

of

objectives
Selection

of

an

appropriate
Methodology
Collecting

qualitative

and quantitative data
Evaluation of data

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Development of formal
to report

to

present

data
Estimation

of

the

budgets
Assessment of whole
project and implement
improvement.

1.2 Budget section
It is considered as most important aspect of particular. The budget
section is determined the total expense that should be managed by
researcher for carrying out the research on Crossrail Project. However, the
estimated cost of whole research is £2000 in which researcher will be able
manage different operations of investigation.
Expenses

Amount

Assessment of secondary data

£500

Research collection from Primary

£600

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data
Stationary costs and research

£700

software cost
Fuel Cost

£120

Miscellaneous expenditure

£80

Total

£2000

1.3 Questionnaire
For collection of primary data, researcher develops a questionnaire in
order to assess the perception of local people of community. The
questionnaire for present investigation is mentioned below:
Name:
1: Gender
Male
Female
2: Age Group :

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16-20 years
21-25 years
26-30 years
31-35 years
35 and above
3: Do you have knowledge about the upcoming “Crossrail” project of the
government of UK?
Yes
No
4: According to you what is the most important benefit that would you
assess from cross rail project?
Enhancing travel experience
Increase in connectivity of the public transportation
New experience of travelling around the capital
Reduction in load on existing transportation system
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5: Do you think, Crossrail project would develop new opportunities for
employment?
Yes
No
6: Do you agree that Crossrail will be found as important milestone of
economic growth in the London?
Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree
7: Would you like to you use different services of Crossrail Project?
Yes
No
8: Do you think that Crossrail project will change the era the city of

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transportation?
Yes
No
9: Will cross-rail project reduce the pollution by lowering traffic?
Yes
No
Maybe

TASK 2
2.1 & 2.2 Mean, Mode and Median
Table 1: Descriptive Analysis
No. of
Amount

Customers

Mid-value

Spent (£)

(f)

(x)

Cumulative
Fx

Frequency (CF)

10-20

20

15

300

20

20-30

22

25

550

42

30-40

20

35

700

62

40-50

14

45

630

76

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50-60

16

55

880

92

60-70

10

65

650

102

70-80

8

75

600

110

80-90

6

85

510

116

90-100

4

95

380

120

120

5200

By using above descriptive analysis, store manager is able to take
appropriate decision regarding store promotion with the help of various
elements that play significant role in decision making process.

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Mean: This approach examines the sum of all numeric information
which has been collected from different sources as per the different
business requirement. In the present study, the mean value is used to
examine the number of customers and their actual spending of cloths
(Weygandt, Kimmel and Kieso, 2009). This information will support
owner of the Carmen clothing shop for taking wide range of business
decision associated with the promotion and advertisement through
which profitability and sales of shop will be increased.
Mean = Total of Fx/ Total of number of customers
= 5200/120= 43.33

Mode: It is determined that number that consists maximum frequency
while collection of different kind of data. In the present research, it has
been found that maximum number of customers is spending between
£20 & £30 on clothes. This is because customer spending between £20
& £30 has recorded highest frequency of 22 customers. Therefore,
calculation of mode of present study is carried out below:

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Mode = Lmo + (Δ1/ Δ1 + Δ2) * i
= 20 + (22-20) / (22-20) + (22-20)* 10= 25

Median: It is addressed as most important statistical time that
determines the middle value of the collected information (Platt and
Huettel, 2008). The calculation of median for the present research is
carried out below:
Median = Lower limit + (60- CF of Previous Class Interval)
/Frequency * Class interval
= 30 + (60-42)/20*10
= 30+18/20 *10
= 30+9
= 39

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2.3 Range and Standard Deviation
Table 2: Measure of Dispersion
No.

of

Amount Spent customers

Mid-

(£)

(F)

value(X)

X^2

Fx^2

Fx

10-20

20

15

225

4500

300

20-30

22

25

625

13750 550

30-40

20

35

1225

24500 700

40-50

14

45

2025

28350 630

50-60

16

55

3025

48400 880

60-70

10

65

4225

42250 650

70-80

8

75

5625

45000 600

80-90

6

85

7225

43350 510

90-100

4

95

9025

36100 380
28620

120

495

33225

0

5200

Measurement of dispersion is termed as systematic process in very
effective tool of data evaluation through which researcher examine how wide
spread the set of given data is in the defined variables. The process provides
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significant support in evaluation of various facts and figures so as
management is able take different business decision as per the distinct
business requirement (Black, 2011). There are three major elements that are
evaluated in measurement of dispersion that include Standard deviation,
Range and variance. The evaluation of these factors is carried out below:
Standard Deviation: The term standard deviation provides significant
assistance to researcher in order to assess the variation between given
set of information or among various variables (Kimmel, Weygandt and
Kieso, 2010). In the context of present investigation, standard
deviation helps owner of Carmen clothing shop for taking appropriate
decisions related to pricing of different product by checking whether
pricing stick below 40 price range or increase it above 40.
Variance = s2 = ∑Fx2 – ((∑Fx)2 /n)/ n – 1
Variance = 511.48
Standard Deviation = S= √s2
Standard Deviation = 22.61

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Range: In the decision making process, range assists researcher in
computing the different between highest value and lowest value from
the information which have been collected from different sources
(Saaty,

2008).

It

also

provides

significant

support

in

different

management decisions.
Range = (100-(10/ (20+1))-(10/ (4+1)))
Range = 97.52

2.4 25th Percentile (Lower 25th Percentile (Lower Quartile) and 75th
Percentile (Upper Quartile) and use of Percentile
Quartile:
In general, quartile is addressed as most important statistical approach
which is applied in different management decision. It generates appropriate
data by dividing set of numbers into four different quarters as per the
requirement of study which are denoted with: Q1, Q2, Q3, and Q4. The first
quartile (Q1) determines the data in the form of middle number which is
occurred between smallest number and the median of the predetermined set
of data (Dew, Read, Sarasvathy and Wiltbank, 2009). On the other hand,
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second quartile (Q2) is determined median of the data. In addition to that
the third quartile (Q3) present the middle number which is occurred between
highest number and the median of particular set of data associated with a
certain investigation.

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Percentile:
This statistical measure provides significant assistance to a decision
taker by defining the value which falls under a below with reference to a
particular set of percentage. For instance: 25th percentile determines 25
portion of particular set of data.
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Lower quartile/25th percentile

24.5

Upper quartile/75th percentile

58.8

Interquartile range:
In general, inter-quartile range is used as a measure of variability
which is derived with reference to certain data that is divided into four
different quarters. In other words, this term determine the variation between
upper quartile and lower quartile. It plays important in decision making
process within an organization.
Interquartile range

34.2

2.4 Calculating the correlation coefficient as per the additional information
provided and discuss it advantages to a business
Sales (Units)

Discounts (%)

20

1

40

4

50

6

55

6

60

10
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70

12

80

13

90

14

100

15

The correlation coefficient of sales and discount are given below:
Table 3: Correlation and Coefficient
Particular

Sales (Units)

Discounts
(%)

Sales (Units)

1

0.97

Discounts (%)

0.97

1

With reference to the formula R2 =0.97
As per the above calculation of the correlation coefficient, there is
prefect correlation addressed between the sales and discounts variable.
Therefore, it can be stated that if the sales of units is increased then
discount rates are also increased in similar way and vice-verse. The value

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coefficient of correlation is 0.97 that indicates that change in number of
sales units significantly influences rate of discount.

TASK 3
3.1 & 4.1 Produce line graph
As per the present case, the Managing Director of Clothing Company is
acquiring clothes from different countries in order to meet requirement of
consumers with an appropriate manner. By satisfying client’s needs with
different kinds of clothes, company has gained loyalty of consumers In
regard to this, data of last 10 years associated with sales and advertising
costs has evaluated to examine the growth in sales with reference to
advertisement expenditure.
Line graph:

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Illustration 1: Line graph

Pie Chart:

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Net income generated by 5 branches of company
130
240

140

180

London
Manchester
Edinburgh
Cardif
Liverpool

160

Illustration 2: Net Income Generated by 5 Branches of the company in
2015
Bar Chart:

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Net income generated by 5 branches of company
300
250

240

200

180
160
140

150

130

Column B

100
50
0
London

Manchester

Edinburgh

Cardif

Liverpool

Illustration 3: Bar Graph of Net Income Generated by 5 Branches of the
company in 2015
Advertising Costs and Sales Data of 2002 – 2015:

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Illustration 4: Advertising and Sales data 2000-2013

Scatter Plot on Advertising costs and sales

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Illustration 5: Scatter Plot on Advertising costs and sales

As per the above charts and diagram, it is evaluated that the sales
performance of Clothing Company is showing positive trends and generating
attractive outcomes. There has been several factor identified that have
played important role in the success and growth of business. It includes
change in lifestyle of people, market trends and business environment that
are considered as key drivers of increased demand of the imported products
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and services so as company acquires wide range of clothing products from
all over the world that leads positive impact on the sales and business
performance

of

clothing

company

(Hacklin

and

Wallnöfer,

2012).

Furthermore, it has found that advancement in marketing prospects along
with the application of different kind of promotional tools have increased the
advertising related expenditures of business entity. In addition to that the
use of social media along with application of latest tools of digital advertising
has influenced management of clothing company for investing the huge
amount of funds in marketing. This approach assists business entity to
attract large number of audience that has led positive impact on the sales of
organization and increases marketing related expenditure.
3.2 & 4.1 Trend Lines
Trend lines of Advertising costs:

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Illustration 6: Advertising costs

Trend line of Sales

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Illustration 7: Sales
3.3 Business presentation
Enclosed in PPT.
3.4 Formal Business Report
To,
The Board of Directors of Clothing Company
Date: 7th January 2015
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Subject: Information associated with last 10 years sales performance of the
firm
INTRODUCTION
Clothing Company is making efforts to expand business associated
with imported clothing products that are greatly attracting to people of UK
and generating the demand of for company. In the process, management
requires to take appropriate decision for business expansion. Therefore,
this report carries out detail evaluation of sales data of the 5 different
branches of clothing company. In addition to that evaluation of last 10 year
is carried out with the help of different graphs and charts.
METHODOLOGY
For carrying out the present study with an appropriate manner,
investigator has applied
investigator is

able

to

graphical presentation approach through which
present

the

information

related

to

sales

performance with a systematic manner so as reader or evaluator of data
can easily access the information that have been presented in chart and
bar diagram. Along with this, trend lines are also created to predict the
advertising cost and overall sales with in next five years that assists
managers for taking appropriate business decisions as per the long term
goals of company.
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FINDINGS
As per the graphical presentation of sales and advertisement cost
data, it has been found that sales performance of clothing company is
growing with an content rate due to high demand for imported clothing
products among consumers of UK. With reference to pie chart, it has
addressed that the London branch is termed as a most profitable branch
because it is generating highest net income for the company. In addition to
that Manchester branch of Clothing company is also earning good profit
with the help of high sales volume. However, the assessment of the trend
lines has determined that the sales performance of other branches such as
Liverpool and Cardiff is also improving coming years because trend lines
are showing positive trends.

CONCLUSION
As per the above assessment, it can be stated that management of
company needs to develop various strategic plans and business strategies
in order to grab new business opportunities that would occur in near future.
Apart from that, company is recommended to apply different kinds of
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marketing tools and creative marketing tactics to increase aware of
different clothing products among target consumers that would increase
sales of business entity.

TASK 4
4.2 Prepare a network diagram for activities using Microsoft Project

Illustration 8: Network Diagram

Calculate Project Duration
Critical Path: 1+2+4+5+6+7+11+12
Critical Path duration: 4+3+10+4+6+9+12+20 = 72 days
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Clearly mark the Critical Path
Duratio

Task Name

Start

Finish

07/01/16

12/01/16

3 days

13/01/16

15/01/16

15 days

13/01/16

02/02/16

10 days

18/01/16

29/01/16

4 days

01/02/16

04/02/16

6 days

05/02/16

04/02/16

9 days

15/02/16

25/02/16

2 days

13/02/16

04/02/16

10 days

18/01/16

29/01/16

9 days

01/02/16

11/02/16

12 days

26/02/16

14/03/16

n

Physical preparation 4 days
Organisational
planning
Personal selection
Equipment
installation
Personnel training
Detailed

system

designing
File conversion
Establishment
standards
Program
preparation
Program testing
Finishing
Documentation

of

Predecesso
rs
A
A
B
D
E
F
C
B
D
G, H, I, J

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Follow Up

20 days

15/03/16

11/04/16

K

Prepare a Gantt chart and state the benefits of using it as a Project
Management Tool

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Illustration 9: Gantt chart

Benefits of Project management tools:
The application of the project management tool has provided
significant assistance to a project manager in the form of delegation the
tasks and responsibilities with an appropriate manner, scheduling of different
activities of the project, tracks the report of projects, ensuring the quality of
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project outcomes, time management and etc (Albright, Winston and Zappe,
2010). This increases the reliability and validity of the project.

TASK 4 B
4.3 Calculation of Net present value and internal rate of return
In the contemporary business environment, every organization has to
take different management and investment decisions so as management
uses of kinds of investment appraisal approaches. It is a method which is
used for analyzing the validity and suitability of an investment proposal
(Milkman, Chugh and Bazerman, 2012). It supports management in
evaluation of risk and return on investment. There are several techniques of
appraisals used by different companies such as NPV and IRR.

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Net Present Value:
NPV is termed as a most effective and quick tool for evaluating the
reliability and feasibility of different investment proposal through which
management is able to select best alternative. In this process value of future
cash inflow is evaluated with reference to certain discount factor (Martin,
2015). This tool plays important role in evaluation of time value of money
through which management is able to select most profitable proposal for
company. Furthermore, higher value of NPV determines that particular
project is good for the investment.

Initial Investment: £200000 in both the Projects
Project A @ 10%:
Table 4: Project A @ 10%
Project A
Year

Cash flows

PV factor @10%

Amount

1

55000

0.909

49995

2

67000

0.826

55342

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3

72000

0.751

54072

4

80000

0.683

54640

5

90000

0.621

55890

Total

269939

Less: Initial Investment

200000

NPV

69939

Project A @ 20%:
Table 5: Project A @ 20%
Project A
Year

Cash flows

PV factor @20%

Amount

1

55000

0.833

45815

2

67000

0.694

46498

3

72000

0.579

41688

4

80000

0.482

38560

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5

90000

0.402

36180

Total

208741

Less: Initial Investment

200000

NPV

8741

Project B @ 10%:
Table 6: Project B @ 10%
Project B
Year

Cash flows

PV factor @10%

Amount

1

42000

0.909

38178

2

75000

0.826

61950

3

82000

0.751

61582

4

63000

0.683

43029

5

35000

0.621

21735

Total

226474

Less: Initial Investment

200000

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NPV

26474

Project B @ 20%:
Table 7: Project B @ 20%
Project B
Year

Cash flows

PV factor @ 20%

Amount

1

42000

0.833

34986

2

75000

0.694

52050

3

82000

0.579

47478

4

63000

0.482

30366

5

35000

0.402

14070

Total

178950

Less: Initial Investment

200000

NPV

-21050

Internal rate of return:

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The approach has found very effective in order to check the feasibility
of an investment proposal. It also evaluates the time value of money so as
managers within particular organization can generate good return from
particular investment proposal (Albright, Winston and Zappe, 2010). In this
process, IRR has found very effective in evaluation of the potential profit of
the investment in terms of percentage. Following is computation of IRR for
the present projects:
Internal

rate

return

of = lower discount rate + NPV at lower discount
rate/ NPV at lower rate - NPV at higher rate*
(Higher discount rate – discount rate)

Project A

= 0.10+69939/ (69939-8741)*(0.20-0.10)
= 21.42%

Project B

= 0.10 + 26474/ (26474-(-21050) * (0.20-0.10)
= 15.57%

Recommendations
By considering the above computation of investment appraisal
techniques, researcher has been found that Project A is beneficial for
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company. This is because NPV of project A is 69939 which are higher than
the Project B that is 26474. Therefore, on the basis of 10% discount factor
management should have to invest in Project A. This is because the Project A
is generating more returns. In addition to that the internal rate of return is of
Project A is also higher as compared to NPV of the project B. Thus, it is
suggested to business entity needs to invest funds in the Project A for
generating greater returns. It will increase profitability of business and
provides good returns to firm.

CONCLUSION
As per the above evaluation, it can be concluded that business
decision making is identified as a most crucial aspect of business
management which is having significant impact on the growth and
profitability of business entity. This study has found that an organization can
increase effectiveness of business decisions with the help of various
statistical tools associated with descriptive statistics through management is
able to evaluate different aspect and data such as sales performance and
cost of different operations. This report has found that profitability of
business entity during investment decisions is greatly influenced by
management

decisions

associated

with

selection

of

an

appropriate

investment appraisal tactics such as NPV and IRR.
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REFERENCE
● Albright, S.C.W.C., Winston, W. and Zappe, C., 2010. Data analysis and
decision making. Cengage Learning.
● Black, K., 2011. Business statistics: for contemporary decision making.
John Wiley & Sons.
● Dew, N., Read, S., Sarasvathy, S.D. and Wiltbank, R., 2009. Effectual
versus predictive logics in entrepreneurial decision-making: Differences
between experts and novices. Journal of business venturing.
● Hacklin, F. and Wallnöfer, M., 2012. Management Decision .The business
model in the practice of strategic decision making: insights from a case
study.
● Hacklin, F. and Wallnöfer, M., 2012. The business model in the practice of
strategic decision making: insights from a case study. Management
Decision.

This is a sample on Business
Decision Making,
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