REPORT AND RECOMMENDATIONS FOR MORTONS ENGINEERING LTD
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REPORT AND RECOMMENDATIONS FOR MORTONS ENGINEERING LTD TO: MANAGING DIRECTOR OF MORTONS ENGINEERING LTD FROM: AMY JACKSON PRODUCTION ASSISTANT INTRODUCTION Mortons Engineering Ltd manufacture and supply parts for the railway industry. This report is designed to look into modernising and restructuring the production line. This will involve the purchase of a new computerised system, which will enable the company to expand its current level of output. Using the current level of output and production to forecast cash flows, the three systems will be evaluated using investment appraisal and recommendations made as to which one will be best suited to Mortons engineering Ltd. METHODOLOGY Investment appraisal (also known as project appraisal) is used to make financial decisions on whether or not to invest in a project. It is a methodology for calculating the expected return based on cash flow forecasts of many, often inter-related, project variables. Risk emanates from the uncertainty encompassing these projected variables. The evaluation of...

