ABC is a clothing manufacturer, which has operated in the UK for the last 10 years. As part of its expansion plan, ABC has decided to set up an operating unit in another country. Produce a report by addressing the requirements below: 1. Evaluate the investment appraisal techniques that can be used by an organisation. In answering, you should describe alternative sources of finance available to an organisation that may be accessed through use of the techniques you describe SFM: LO 1 (pcs 1.1, 1.2, 1.3) 1 , ) 2. Apply the relevant investment appraisal techniques to the following scenarios to conduct an investment appraisal for ABC Ltd. The current interest rate is 10%. The options available are: USA: The estimated running expenses per annum amount to (GBP) E210,000. The expected revenue would amount to (USD) $700,000 per annum. In addition, an approval fee of (GBP) ) 22,000 has to be paid in advance for the company to be able to trade within the country on an annual basis. France: It is expected that the running expenses would amount to 190,000 per annum and the annual turnover is expected to be (Euro) 450,000. The organisation will have to pay an approval fee of (GBP) 25,000 in advance for the company to be able to trade within the country on an annual basis. In addition, the organisation will also have to make a one-off Royalty Fee payment of (GBP) 25,000, regardless of the number of operating years. Switzerland: The estimated running expenses per annum amount to (GBP) 200,000 while ( the expected revenue would be (Swiss Francs) CHF 380,000. The organisation would have to pay a licensing fee of (GBP) E30,000 each year. The government stipulated controls ensure that a routine inspection is conducted of the factory every three years, and the cost per inspection would amount to (GBP) 70,000. . SFM: LO 1 (pcs 1.1, 1.2, 1.3) 3. Identify and explain risks that relate to the organisation when moving to the chosen international market, and suggest strategies and techniques to mitigate the identified risks. In doing this, you should: Evaluate the different techniques for risk recording and monitoring Identify and explain an appropriate means of measuring and monitoring risk in the organisation. . SFM: LO 3 (pcs 3.1, 3.2, 3.3, 3.4) 3 , Task 2 Word Count 2500 words maximum. Back to Contents MASSgment 3SCOS Ace 2.0. December 2019 Gewicht Qualtos vots Edu Qual Page 9 of 12 Task 2 Notes and Reference Average Spot Rate table Average Spot Rate Yr. 1 USD ($) 2.10 Euro () 1.80 Swiss Franc (CHF) 10.00 Yr. 2 2.20 1.90 12.00 Yr. 3 2.30 2.00 14.00 Yr. 4 2.10 2.10 12.00 Yr. 5 2.25 1.95 13.00 Yr. 6 6 2.50 1.90 14.00 Present Value table 74 8 9 10% 11% 12% 13% 10% 15% 16% 17% 18% 19% 20% 1 0.90 0.0 QV71 0.002 0.06 0.049 0.38 0.220 0917 O.VOB 0.901 0.895 0.5 0.B27 O.BIO 0.86 0.856 0.847 0.840 0.833 2 0.950 401 0.215 0.025 0.007 0.190 0.073 0.1 0812 6826 0.812 0.797 0.705 0.769 0.796 0.745 0.751 0.718 0.706 9.691 5 0.71 0.042 0.915 0.00 0.064 0.000 0.16 0.794 0772 0751 0.731 0.712 3 0,675 0.60 0645 064 0.609 0.53 0.579 ONA 4 0.101 Okt 0.888 0.855 0.828 0.702 073 0.735 0.70 0.683 0.65 0.696 0813 0.50 0.572 0.52 0.54 0.516 0409 0482 5 0.951 Ope Oss 0.822 0.764 0.787 0.713 0.681 0.650 0.021 0.53 0.567 0.54 0.519 0497 0.176 0456 0.457 0.419 0.402 6 0.912 000 0.007 0.790 0.746 0706 0.000 0.000 0.50 0.54 0.595 0.507 0.400 0.456 042 0410 0.90 0.70 0.362 9.995 . 7 0.333 0871 0.18 0.750 0.7 0.666 ods 0.583 0.547 0.513 0.482 0462 0425 0.400 0.878 0.354 0.933 0.314 0.206 0.299 80.23 0853 0.70 0.781 0.677 0.627 0.52 0.50 0.500 0.467 0.434 0404 070 0.361 0.827 0.806 0.6 0.266 0249 01283 0.6 0.914 0887 0.7 0.705 0645 0.5 0.5 0.500 0.400 0.24 0.391 0.361 0.83 0.308 0.24 0.343 0.329 0.209 0.191 10 0.906 0.820 0.744 0.676 0654 0.550 0.500 0.400 0.422 0.396 0.362 0.22 0.25 0.270 0247 0.927 0.208 0.191 0.176 0.162 11 0.16 0.804 0.20 0.660 0.585 0.527 0475 0.488 0888 0.250 0.317 0.287 0.6 0.7 0.215 0.15 0.178 0.162 0.148 6.185 12 . 072 0.701 0.025 0.557 0.197 Od 0.9 0.6 0.319 0.766 0.957 . 0.05 0.107 Ore 152 0.157 0.24 0.112 13 072 0775 0.001 0.601 0.530 0.460 0415 0.4 0.396 0.595 0.250 0.22 0.204 0.162 0.163 0.55 0.15 0.116 0.101 0.095 14 0.870 0.750 001 0.677 0.505 0442 0.389 0.840 0.299 0.250 0.282 0.205 0.18 0.10 0.14 0.125 0.11 0.00 0.008 0.78 15 0.861 0.74 0612 0.565 0481 0.17 0.69 0.815 0.275 0.8 0.209 0.18 0.160 0.10 0.125 0.106 0.005 0.064 0.01 0.005 16 OM 0726 0.025 0.02 0.45 0.3 0.209 02 02 0.210 0.10 0.163 0.14 0.125 0.107 OR 0.00 0.00 0.00 0.064 17 0.814 0714 0.06 0.618 0438 0.871 0.817 0.270 0.21 0.188 0.170 0.146 0.125 0.000 0.00 0.00 0.0 0.000 0.062 0045 18 0.836 0700 0.57 0.494 0416 0.890 0.206 0.250 0212 0180 0.158 0.180 0.11 0.005 0.001 0.00 0.05 0.061 0.044 0.00 19 0.80 0.68 0.570 0.475 0.398 00 ZIP 0.250 0.19 0.16 0.13 011e 0.098 0.003 0.00 0.00 0.01 0.04 0.087 0.031 20 0.0 0,073 0.654 0.456 0.77 0.42 0.250 0.15 0.17 0.17 0.124 0.104 0.007 0.073 0.061 0061 0049 0.007 0.001 0.00