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PresentorAzamSuhailDetermine CBA: divide [costs] / [benefits]If the answer is 1, it was not feasible/not worth.1. CBA Constantland has better CBA than Hibiscus.Thus, we prefere for the CBA Constantland.compare the costs of a project (investment), with the value of its results:Am I getting my expected return?Evaluate one investment vs. anotherROI = [(Payback - Investment)/Investment)] x100

If the ROI is near to 100% or more, therefore the investment is considered to be highly returned.

2. ROIROIIf the ROI is near to 100% or more, therefore the investment is considered to be highly returned

Thus, we prefer Constantland ROI.TCO (TOTAL COST OF OWNERSHIP)

all costs of owning and operating an asset over its expected useful life.Ensures a comprehensive analysis of long term effects and helps account for hidden costsCompanies that rely solely on TCO end up following a strategy that minimizes expenditure rather than maximizes return!Determine which option has the lowest TCO

PP( PAYBACK PERIOD)

The length of time taken to repay the initial capital cost

ARR( ACCOUNTING RATE OF RETURN)Shows profitabilityA comparison of the profit generated by the investment with the cost of the investment Average annual return or annual profitARR = -------------------------------------------- Initial cost of investment

If the ARR % is higher, therefore the investment is considered to be highly returned

Thus, we prefer Constantland ARR.NPV (NET PRESENT VALUE)

How much would you need to invest today to earn x amount in x years time?Value of money is affected by interest rates Future ValuePV = ----------------- (1 + i)n

If the NPV is higher, therefore the investment is considered to be highly returned.

Thus, NPV Hibiscus gain more profit.CF (CASH FLOW)

Basically comparing profitability vs. risk

CF HIBISUCSCF CONSTANTLANDCash flow

RM29442.00 in 3 years.Cash flow

RM710 in 3 years.

IRR (INTERNAL RATE OF RETURN)Helps measure the worth of an investment Allows the firm to assess whether an investment in the machine, etc. would yield a better return based on internal standards of return

IRR HIBISUCSIRR CONSTANTLANDNPV for this project is not equal to 0

Total IRR=RM710

PI ( PROFITABILITY INDEX)Engaging NPV / Initial capital cost

Net Present Value Profitability Index = --------------------- Initial Capital Cost

PI HIBISUCSPI CONSTANTLAND= Net Present Value / Capital Cost

= 2.84

= Net Present Value / Capital Cost

= 0.2407If the PI is higher, therefore the investment is considered to be highly returned.

Thus, PI Hibiscus gain more profit.HibiscusConstantlandCBA = 1.42 > 1.0 not feasibleCBA = 0.43