Question B) What other investment appraisal techniques are used apart from NPV and highlight their advantages and disadvantages. (20 Marks)

Use this reference material for part A of the Question REFERENCE MATERIALS Figures in F$ million y/e 31/12/16 y/e 31/12/17 y/e 31/12/18 y/e 31/12/19 y/e 31/12/20 Sales revenue 300.0 312.1 315.2 318.4 Artists and repertoire costs 90.0 90.0 90.0 90.0 Production costs 45.0 45.0 45.0 45.0 Licensing costs 2.0 2.0 2.0 2.0 Administrative expenses 54.0 55.1 55.1 55.1 Selling and marketing expenses 42.0 42.8 42.8 42.8 Distribution expenses 6.0 6.1 6.1 6.1 Interest on project funding loan 5.0 5.0 5.0 5.0 Depreciation 10.0 10.0 10.0 10.0 Operating profits 46 56 59 62 Tax on operating profits 14 17 18 19 Company purchase value 200 Total cash flows 200 32 39 41 44 Discount at 10% 1 0.909 0.826 0.751 0.683 Present values 200 29 32 31 30 NPV 77 Notes: Module Name: Cost and Management Accounting 3 Page 6 of 6 Figures have been prepared for purchasing and running the company for four years Sales volumes are assumed to grow at 1% per year over the appraisal period Inflation on sales prices will run at 3% per annum Artists and repertoire, production and licensing costs have been included at their value for 2019 Admin, selling & marketing, and distribution expenses have been assumed to inflate at 2% per annum The general rate of inflation over the period will be 2.5% per annum The real cost of capital is 10% A loan of F$ 200m will be taken out to fund the purchase End of