Question 2

on the basis of these answers please answer the following questions in detail.

Discounted cash outflow

Total= 4958900

Payback period

= 2.22 Years

Discounted payback period= 2+ 0.6= 2.6 Years

Computation of NPV;

= 4900506

Profitability index

1.99

a) Write a report to the Executive Board of Powersol Plc to explain to the members the reasons that you adopt the NPV appraisal method against the other possible alternative investment appraisal methods. Include in this section a discussion of the critical factors that might affect the outcome of this investment.

b) Explain any non-financial factors that would be relevant to the final decision. Flag any areas where you suggest more information is needed.