Dss Coursework

Topics: Net present value, Time value of money, Rate of return Pages: 3 (787 words) Published: December 12, 2012

Course name: BSc in Business Computing
Subject title: Decision Support Systems
Student Name:| Sidikov Khasan|
UBU Number:| 11033772|
Lecturer:| Cyril Antony|
Module Name:| Decision Support Systems|
Batch #| 410|
| |


1. What is the Net Present Value of the garage’s cash flow with and without the platform? Net present Value of the Garage’s cash flow with Platform: NPV = £ 173,614
Net present Value of the Garage’s cash flow with Platform:
NPV = £ 38,047
i. Should the garage manager buy the platform?
Garage manager should buy the platform because, the productivity of the mechanics and profitability of the firm will increase as a result of the acquiring the platform. This will also positively affect to the NPV of the company cash flows and we can see it in above result. 2. The revenue estimates are relatively rough. How sensitive is the net present value of the garage’s 5 year cash flow to changes in the revenue from fuel, non-fuel and car repair? ii. From the calculations of the sensitivity of fuel, non-fuel and car repair revenue analysis it can be seen that the biggest source of making revenue is car repair though latter two are also highly appreciable. Main reason for it is the firm making profit from the big services and that services are very beneficial although their number is not high. Less services make more profit means that every base of revenue has great necessity in overall NPV calculation: absence of any of them affects negatively. iii. What recommendations can you make for the running of Richmond Garages Ltd.? Results of sensitivity analysis show that firm’s greatest profit is done by car repair service, but this does not mean that other services doesnot have as high importance as the former. They also need some attention and they also have to be improved. Main thing is the Richmond Garages has three areas which make revenue for...
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