Boots Investment Appraisal Project Case Study

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1. C. The investment should proceed because it will generate enough cash flows to recover the original investments and earn additional profits. Also, the business will expand which has got implications for the goodwill created. The brand will expand hence increase customer base. Boots Investment The financial analysis shows a consistent increase in revenue which means the business will grow with time. Despite the steady growth in revenues and hence profits,
2. the costs are only increasing by 3 percent which means there are no expected losses in future. Taxation is accounted for, and such damages would not be massive, and the business will be able to pay for tax and other costs with time. The difference between the capital investments and the current value of future cash flows is Thus there is no reason for our financial analysis as to why the business should not proceed to invest in this project.
3. As shown in the adjacent columns to the NPV, the company will be able to recover the originals investment in only three years. Part of the third year’s and all of the rest of the cash flows will constitute profits.
4. Other three Factors to consider: Apart from the numbers Boots should also look at some of the strategic factors that can impact the business. Some of the obvious of them are below;

Impact on current revenues: Although we have calculated a confident….

1. C. The investment should proceed because it will generate enough cash flows to recover the original investments and earn additional profits. Also, the business will expand which has got implications for the goodwill created. The brand will expand hence increase customer base. The financial analysis shows a consistent increase in revenue which means the business will grow with time.