As a Unity Holdings Plc junior manager, you have been asked for your annotated calculations and recommendation regarding a decision whether to lease or buy new premises.The option to buyThe costs of buying include £1,950,000 for the freehold land, building costs of £2,612,500, and £268,100 for fittings and equipment. At the end of the fifth year the property is expected to be worth £4m.The option to leasThe building to be leased requires refurbishment that will cost £500,000 and fixtures and fittings will cost £283,000. The terms of the 5 year lease are £50,000 per month.Comply with company policiesAny decision should be based on the results of calculating Net Present Value (NPV) of 5 years of cash flows using a cost of capital of 10%, Payback Period (PBP) must be less than 3 years, and the Internal Rate of Return (IRR) of the project should provide a significant cushion in case of increases in inflation or interest rates that the directors are concerned are unpredictable.The cash flowsBoth options will use the same cash flows. Year 1 sales revenue is expected to be £7,150,000; the cost of core products are £2,370,000; ancillary stock purchases £1,250,860; staff costs £1,138,020; light & heat £368,720; other overheads £604,240. The cash flows for years 2 to 5 are the same, but are expected to increase by 2% inflation each year.Requirements for Question 3Using the information above and in accord with the above stated company policy you are required to calculate the following for both options:i. Net Present Value (NPV)Property lease option 5 marksProperty purchase option 5 marksii. Payback period (PBP) and Discounted Payback Period (DPBP) 8 marksiii. Internal Rate of Return 2 marksiv. Based on your calculations for each of the above state which option you recommend? 5 marksv. Critically discuss the limitations of the above project appraisal techniques. 5 marksFor more information on Property Purchase Option check on: https://en.wikipedia.org/wiki/Lease-option
Why Choose Us
At Acme Writers, we always aim at 100% customer satisfaction. As such, we never compromise o the quality of our homework services. Our homework helpers ensure that they craft each paper carefully to match the requirements of the instruction form.
Professional Academic Writers
With Acme Writers, every student is guaranteed high-quality, professionally written papers. We ensure that we hire individuals with high academic qualifications who can maintain our quality policy. These writers undergo further training to sharpen their writing skills, making them more competent in writing academic papers.
Our company maintains a fair pricing system for all academic writing services to ensure affordability. Our pricing system generates quotations based on the properties of individual papers.
Acme Writers guarantees all students of swift delivery of papers. We understand that time is an essential factor in the academic world. Therefore, we ensure that we deliver the paper on or before the agreed date to give students ample time for reviewing.
Acme Writers maintains a zero-plagiarism policy in all papers. As such, Acme Writers professional academic writers ensure that they use the students’ instructions to deliver plagiarism-free papers. We are very keen on avoiding any chance of similarities with previous papers.
Customer Support 24/7
Our customer support works around the clock to provide students with assistance or guidance at any time of the day. Students can always communicate with us through our live chat system or our email and receive instant responses. Feel free to contact us via the Chat window or support email: support@Acme Writers.
Try it now!
How it works?
Follow these simple steps to get your paper done
Place your order
Fill in the order form and provide all details of your assignment.
Proceed with the payment
Choose the payment system that suits you most.
Receive the final file
Once your paper is ready, we will email it to you.
Our writers complete papers strictly according to your instructions and needs, no matter what university, college, or high school you study in.
Our Homework Writing Services
Acme Writers holds a reputation for being a platform that provides high-quality homework writing services. All you need to do is provide us with all the necessary requirements of the paper and wait for quality results.
At Acme Writers, we have highly qualified academic gurus who will offer great assistance towards completing your essays. Our homework writing service providers are well-versed with all the aspects of developing high-quality and relevant essays.
Admission and Business Papers
With Acme Writers, we will help you secure a position at your desired institution. Our essay writing services include the crafting of admissions papers. We will still help you climb your career ladder by helping you write the official papers that will help you secure a job. We will guide you on how to write an outstanding portfolio or resume.
Editing and Proofreading
Acme Writers has a professional editorial team that will help you organize your paper, paraphrase it, and eliminate any possible mistakes. Also, we will help you check on plagiarism to ensure that your final paper posses quality and originality.
Acme Writers harbors professional academic writers from diverse academic disciplines. As such, we can develop homework writing services in all academic areas. The simplicity or complexity of the paper does not affect the quality of homework writing services.