A report into selected aspects of capital appraisal and long term decision making

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    Description

    Assessment brief
    Scenario
    Having recently graduated you are employed as a trainee accountant in the finance
    department of a large organisation. The Director of Finance has asked for a report
    considering asset investment decisions and capital rationing: the company is considering a
    major capital investment decision, a replacement of its fleet vehicles and the DOF wants
    to see any advantages of purchasing over leasing capital assets by the organisation in the
    environment of risk and uncertainty caused by Brexit.
    Requirement: Write a report using examples considering the evaluation of the choice
    between borrowing to purchase and leasing an asset. Your report should consider the
    following aspects of investment appraisal. How might the before and after tax costs of
    debt affect the debt decision? How might the decision be considered in an environment
    where capital availability is limited? What factors should be considered in making a capital
    investment in an environment of risk and uncertainty?

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