Assignment: Capital Investment Appraisal of three companies Ropeway, Old Boatyard, Sail Loft
The report is for Michael Johnston and his wife Sheila. This report is to decide which of three projects will be better to invest in to get the best value of it.
Anton Chumel
30/10/13
* Introduction
* Methodology (Investment Appraisal Methods: advantages & disadvantages of each method)
* Non Discounting Methods
* Simple Payback
* ARR (Accounting Rate of Return)
* Discounting Methods
* NPV (Net Present Value)
* Discounted Payback
* IRR (Internal Rate of Return)
* Data Analysis
* Recommendations
* Bibliography
* Appendix
I. Introduction
Michael Johnston recently has approached to the Chamber of Commerce to ask for advice concerning an investment as he and his wife want to open a bistro café. Therefore regards to his, Michael`s, the words he was recently redundant and has received a £200,000 as redundancy payment. In addition to that he had an investment in the Fidelity Moneybuilder Growth Fund of £100,000. Least but not last investment Michael has got is £50,000 in 5 year ISA (Individual Savings Account). His wife has had a small business where she provided her services of cooking on funeral teas, weddings and parties for children. All this Sheila has been doing by her own in their large kitchen in house. Furthermore Sheila`s parents were ready to help them with money and are willing to lend them £50,000. So overall sum of their possible investment appears to be:
£200,000+£100,000+£50,000+£50,000= £400,000
II. Methodology (Investment Appraisal Methods)
There are five methods of investment appraisal have been used in this report. They are named in the order they have been used in attached documents: Simple Payback Period, ARR (Accounting Rate of Return), NPV (Net Present Value), Discounted Payback Method and IRR...