A Series of Ansoff Growth Strategies can Set the Direction for the Company‘s: Financial Analysis Assignment, NUS, Singapore

Assignment Details:

A series of Ansoff growth strategies can set the direction for the company‘s strategy such as market penetration (project A), market development (project B), product development (project C), and diversification (project D).

At present, the company is not willing to consider projects C (product development) and D (diversification strategy) owing to the risks involved in manufacturing and marketing new products.

Following a market and financial research conducted by the company, the expected cash flows of two marketing projects (A and B) for the next three years are provided in the table below.

As the accounting consultant of Glyndwr Marketing Ltd, you are required to provide critical advice to a client on the best investment decision, on whether to invest in marketing projects A or B.

In order to maximize the investment return to your client, you are required to employ five main investment appraisal techniques such as the techniques of PP (Payback Period), Discounted PP, ARR (Accounting Rate of Return), NPV (Net Present Value), IRR (Internal Rate of Return) and Sensitivity Analysis.

With the prevailing interest rate in the lending and borrowing markets, as a professional accountant, you consider that the cost of capital (r or i) at present is 4 percent. 

Required Tasks:

• You are required to calculate the PP, Discounted PP, ARR, NPV, IRR, and Sensitivity Analysis of each project.
• Discuss the detailed advantages (strengths) and disadvantages (weaknesses) of each method of investment appraisal techniques.
• You are required to comment on the stability of the projects.
• Show the ranking of the projects using all the above criteria, and as a professional accountant, critically advise your client on the best investment action, on whether to invest in marketing project A or B.