Investment Decisions

TABLE OF CONTENT

PART A

Business Overview………………………………………………………………3

Introduction………………………………………………………………………..3

Use and conflicts of budgeting…………………………………………………4

Limitations of Budgeting…………………………………………………………5

Conclusion………………………………………………………………………...6

PART B

Business overview………………………………………………………………7

Introduction……………………………………………………………………….7

Capital investment appraisal Technique………………………………………8 ¬¬

• Accounting rate of return..................................................................................8

• Payback period................................................................................................9

• Internal Rate of Return...................................................................................9

• Net Present value...........................................................................................10

Recommendation / Conclusion..................................................................11

References

Appendix A

Appendix B

BUSINESS OVERVIEW

Production solutions limited which is owned by John Smith produces a range of products which are made in batches. The production of goods is starts at the beginning of the month and completed into finished goods at the end. There is no work in progress at the end of the month. Trade payable for raw material is paid at the end of a month purchase and other variable cost is paid during the months of production. This report will cover how production solution will engage in an effective budgeting system which would facilitate control of activities.

INTRODUCTION

Businesses often have goals that they target to achieve. The resources that are to be used in achieving these goals and objectives are often limited. In order to use these scarce resources productively and efficiently,