LOCHSIDE LIQUORS LIMITED (LLL)

Lochside Liquors Limited (LLL)

Lochside Liquors Limited (LLL)

Proposal 1

Year

Outflow

Inflow

Cash Flow

0

390000

0

-390000

1

0

0

2

0

0

3

73000

73000

4

73000

73000

5

73000

73000

NPV

($35,449.06)

IRR

-13%

Payback

2.3

Proposal 2

Year

Outflow

Inflow

Cash Flow

0

390000

0

-390000

1

66000

66000

2

66000

66000

3

66000

66000

4

66000

66000

5

66000

66000

NPV

($34,854.55)

IRR

-5%

Payback

3.2

Proposal 3

Year

Outflow

Inflow

Cash Flow

0

390000

0

-390000

1

145000

145000

2

145000

145000

3

0

4

0

5

0

NPV

($34,147.26)

IRR

-18%

Payback

5.3

Proposal 4

Year

Outflow

Inflow

Cash Flow

0

390000

0

-390000

1

16000

16000

2

16000

16000

3

16000

16000

4

16000

16000

5

16000

16000

NPV

($35,309.09)

IRR

#NUM!

Payback

2.8

Proposal 5

Year

Outflow

Inflow

Cash Flow

0

390000

0

-390000

1

70000

70000

2

70000

70000

3

70000

70000

4

70000

70000

5

70000

70000

NPV

($34,818.19)

IRR

-4%

Payback

4.4

Proposal 3 should be chosen as the NPV of Proposal 3 is greater than that of Proposal 1, 2, 4 & 5. As per the calculations attached in excel sheet, we can easily say that Proposal 3 is the most suitable one for Indy Fire and Rescue Service Inc.. We have analyzed the given cash flows of two Proposals using techniques such as Net Present Value (NPV), payback period and Internal Rate of Return (IRR). The reason for analyzing two Proposals by multiple techniques is to increase the reliability and authenticity of our forecast. From the following table, we can easily see that Net Present Value of Proposal 3 is greater than that of Proposal 1, 2, 4 & 5. We accept the Proposal having highest value of NPV because higher the NPV, greater would be the returns and profitability of the Proposal. (Rappaport 2008a 140)

An approach used in capital budgeting where the present value of cash inflows is subtracted by the present value of cash outflows. NPV is used to analyze the profitability of an investment or project. NPV compares the value of a dollar today versus the value of that same dollar in the future, after taking inflation and return into account. If the NPV of a prospective project is positive, then it should be accepted. However, if it is negative, then the project probably should be rejected because cash flows are negative.

The role of a financial manager cannot be solely the command of the finances; it also needs to include the ability to help the organization achieve its goals. In most governmental organizations? the acceptable leadership approaches have moved away from power-oriented autocratic styles to ones characterized by participatory environments. This shift has occurred within the context of the changing nature of the workforce in recent decades. The increased educational and economic levels of today's workforce have made participatory styles of leadership the preferred models for organizational success? although the definition of the best leadership style ultimately depends upon the situation. Governmental managers must be able to assess the work environment and adapt their style accordingly. (Mills 2010 30-33)

The ability to assess the situation within the organizational setting means that the individual must be able to assess her own styles of leadership and interactions. Interacting with the behavior styles of others in the organization is part of this process? in addition? the process involves reviewing how you deal with conflict and how you address problem solving? and recognizing the need to maximize the roles of other players in the organization. Conflict is inherent in any organization and how the leader addresses it helps to define the value of the involvement of group participants. The issue is not whether conflict exists but rather whether it is being used constructively for issue resolution rather than causing confrontation. For example? betting on the outcome of the World Series creates a conflict between ...