In Researching The Types Of Investment Appraisal Methods, Learners Should Include The Advantages And Disadvantages Of Each Method: Investment Appraisal Techniques Assignment, TUD, Ireland

Task Summary:

This task requires learners to research the topics of investment appraisal techniques, working capital and sources of finance and then apply the knowledge gained to the company “Edmond Hotel Limited” based in Clare.

Part I – Investment Appraisal

In researching the types of Investment Appraisal methods, learners should include the advantages and disadvantages of each method. The methods critiqued should include but are not constrained to the following:

1. Payback

2. Discounted Payback

3. Accounting Rate of Return

4. Net Present Value

5. Internal Rate of Return

Learners will research different capital investment appraisal techniques and apply those techniques and elements to a scenario provided. Learners will include in their report an analysis of both discounted and non-discounted techniques of capital investment appraisal.

Learners will be required to create and demonstrate models of capital investment appraisal techniques. Specifically, learners will be asked to use the scenario given for Edmond Hotel Limited and provide the following information in the report:

1. Apply the Net Present Value Method and provide a recommendation as regards whether Edmond Hotel Limited should proceed with building the new wedding venue

2. Using the discounted payback method, establish the discounted payback period for Edmond Hotel Limited if the wedding venue is built

3. Calculate the IRR for the project Spreadsheet software may be used.

Learners will provide a critique of relevant sources of finance, highlighting the sources of finance most appropriate for a company like Edmond Hotel Limited. Learners will distinguish between those sources of finance suitable for capital investment project and those suitable for working capital requirements. Learners will ensure that all management queries regarding financing within the scenario given for Edmond Hotel have been dealt with in their report.

Part III – Working Capital

Discuss the importance of ensuring effective working capital management during the building of the venue and going forward into the future. Discuss the specific measures that could be taken by Edmond Hotel Limited to ensure that investment in working capital is at an optimum level. Learners will ensure that all management queries regarding working capital within the scenario given for Edmond Hotel have been dealt with in their report.

Part IV– Report

Using work completed in Part I – Part III, prepare a report for management summarising recommendations and conclusions.