Chosen Company is GlaxoSmithKline UK

Question

The first investment under consideration is to make further investment in their current product, which needs initial investment between 40,000,000 and 50,000,000 and has a life of 10 years. The finance department appraised some other similar investments before using different investment appraisal techniques.

2. Investment appraisal: You plan to use NPV and IRR techniques to evaluate the project. Critically discuss NPV and IRR techniques and the implications of the investment on the Company. Risk and uncertainty in investment appraisal should be considered before you make recommendation. The discount rate is 12% for the Company (Ignore inflation and taxation).

Note: Please present NPV and IRR results using small tables. You need to make decision on which investment appraisal format that you will choose. The project will be based on your chosen company, therefore, you have the flexibility to decide the project using your ESTIMATE. The investment should be around 40m to 50m, but how the money is invested would depend on the nature of the investment.

Sensitivity analysis will be helpful to analyse different scenarios for the appraisal. Suggested word: 600-750 words.