BUSF_A01.qxd

Chapter 5 • Practical aspects of investment appraisal Kitchen Appliances plc Kitchen Appliances plc is assessing an investment p ...

An example of an investment appraisal Whizzos sell at £80 each with variable costs of £40 each. Lower Whizzo sales volumes would ...

Chapter 5 • Practical aspects of investment appraisal part) and the £10,000 rent of the outside warehouse will be paid: thus the ...

An example of an investment appraisal Discounting Tax on Capital Net Discounted Initial Working Operating operating allowance ca ...

Chapter 5 • Practical aspects of investment appraisal 5.8 Capital rationing In Chapter 4 we saw that businesses will maximise th ...

Capital rationing A business is unable or unprepared to invest more than £500,000 in the current year, but has the following pro ...

Chapter 5 •Practical aspects of investment appraisal Listed below are the cash flow characteristics of four investment projects. ...

Capital rationing There is no mathematical reason why the optimal solution should not completely exclude one of the projects. No ...

Chapter 5 • Practical aspects of investment appraisal For a wealth-maximising business, it would appear at first glance that the ...

Replacement decisions In this case using this approach was not too laborious because the lowest common multiple (LCM) is only 12 ...

Chapter 5 • Practical aspects of investment appraisal One way to do this is by trial and error. We could try to find an amount s ...

Routines for use with investment projects profitable opportunities overlooked by one business will probably be taken up by anoth ...

Chapter 5 • Practical aspects of investment appraisal The extent of the use of post audits had increased from 33 per cent in 197 ...

5.11 Investment appraisal and strategic planning 5.11 Investment appraisal and strategic planning So far, we have tended to view ...

Chapter 5 • Practical aspects of investment appraisal Objectives are much more precise and operational. We reviewed possible obj ...

5.12 Value-based management Select strategic options Here the best strategic option or options are selected and formed into a st ...

Chapter 5 • Practical aspects of investment appraisal The principles of SVA A business has a value at a particular time because ...

Value-based management Corporation tax rate The corporation tax rate clearly affects cash flows and value because, broadly, tax ...

Chapter 5 • Practical aspects of investment appraisal SVA’s problems include: l Possible conflicts between value drivers, such t ...

Value-based management l Use capital invested more efficiently. This includes selling off any assets that are not generating ret ...