TASK P&I plc is a cookware manufacturing company, operating in the UK a

TASK

P&I plc is a cookware manufacturing company, operating in the UK and some parts of the Europe. Currently, some of their productions such as stainless steel pots and energy-saving clay pots have been outsourced due to lack of available resources. However, strategic management of P&I plc is looking to invest in a project manufacturing stainless steel pots OR energy-saving clay pots. 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 (stainless steel pots) is £90,000 and for project B (energy-saving clay pots) is £95,000. The discount rate required is at 14%. The net cash flows for two projects can be summarised as below:
Year
Project A – Stainless steel pots
Net cash flow £
Project B – Energy-saving clay pots
Net cash flow £

1
35,000
28,000

2
45,000
44,000

3
68,000
72,000

4
79,000
98,000

5
105,000
110,000

You are required to write an essay on business decision making, comparing the key aspects of the payback period and Net Present Value (NPV), and financial and non-financial factors used to aid decision making.

Common Assessment Criteria
Marks available

1. Calculation of the payback period
10

Calculation of the payback period (years and months) in project A and B.

2. Calculation of NPV
20

Calculation of the NPV in project A and B.

3. Analysis and Discussion:
60

The ability to evaluate and analysis the calculated results and make the final decision by comparing two main financial techniques used to evaluate projects.
Taking financial and non-financial factors and their implication on investment decision making process into the account.

5. Overall presentation including correct referencing:
10

Use of Harvard referencing and overall presentation.

TOTAL
100

Length Required

Approximately 1000 words
Formatting and Layout

Please note the following when completing your written assignment:
Writing: Written in English using appropriate business/academic style
Focus: Focus only on the tasks set in the assignment.
Length: Approximately 1000 words
Document format: Essay
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.

Cover page – Ensure a clear title, course, name and student ID number is on the cover sheet.
Introduction
Main Body
Conclusion
Reference list using Harvard Referencing Style.
MAXIMUM LENGTH

Assessment 1: 1000 words (+/- 10%).

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