Investment Decision Evaluation and Recommendation Report for Cycle-Power Ltd

Section 1: Financial Analysis and Interpretation

Prepare an executive report for the board of directors of Cycle-Power Ltd evaluating the investment decision and recommending which project(s) the company should undertake. Please ignore taxation. Your report should include the following content:
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1. Financial analysis, and interpretation, including:
• Identification and explanation of the irrelevant costs associated with the decision.
• Forecasted annual (and total) net cash flows and profits for the next 5 years.
• Appropriate cost-volume-profit (CVP) analysis identifying the break-even point and the margin of safety.
• Appropriate capital investment appraisal analysis, including: Payback Period (PP), Net Present Value (NPV) and Internal Rate of Return (IRR).
• Appropriate NPV sensitivity analyses using the “Zero- NPV” technique and
employing at least three different assumptions.

2. Critical discussion and evaluation of the strengths and weaknesses of the different financial techniques required in section 1. Reference to the specific case study and relevant academic studies is required.

3. Critical discussion and recommendation on how Cycle-Power Ltd could improve their working capital management.
 
4. Critically discuss key non-financial factors that may impact this investment decision using PESTLE analysis.