MN7061 Accounting For Accountability And Decision Making Assignment Sample

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1: Introduction to Accounting For Accountability And Decision Making Assignment Sample

This report is formulated to determine the most accountable and financially realistic investment opportunities that Birds Bakery can take with the single aim of making the best of the use of the £1 million investment budget. From this context, the report aims to identify strategic domains where this investment is likely to bring high return in terms of enhancing operational efficiency, strategic positioning and in the light of the fast-evolving food to go and bakery market. The scope of the report is to evaluate the financial credibility and sustainability of the returns that could be generated from a well-stated investment for a period of a few years based on the short- and long-term impacts of each possible initiative.

This report also offers objectives in terms of detailing a complete overview of the competitors with qualitative and quantitative analysis of key players in the market. By helping to position Birds Bakery in comparison to its peers, it identifies where this firm is already positioned, as well as where it can differentiate and innovate. This is then explored in some areas of potential investment. One that involves investment in machines and construction to increase the production efficiency, continuation of the rebranding strategy to modernise the appeal of the company brand, investment in IT and technology to empower automation, expand online presence and further make use of customer data to aid in better decision making. The report considers investment in human resources, including training, staff retention and productivity enhancement plus suggested areas of investment using current market trends and operational requirements.

This includes a critical analysis of return of investments using a number of financial appraisal tools. Assumptions and cash flow forecasting, cost of capital evaluation, Payback Period, Accounting Rate or Return (ARR), Return On Investment (ROI), NPV, IRR, Cost Benefit Ratio, MIRR are also amongst these. Collectively, these will shape informed, data driven, and agenda set investment decisions by Birds Bakery.

Sample papers and reference materials are offered to help students improve their understanding of assignment writing and academic requirements. Working as a reliable assignment help UK, we promote originality while offering academic support. The Accounting For Accountability And Decision Making Assignment Sample illustrates standard report formatting, key observations, and analytical discussion. All samples are for reference and learning purposes only.

2: Discussion and Analysis

2.1: Competitor Overview

2.1.1: Qualitative Overview

Competitors	Pricing Strategy	Customer Access	Direct/Indirect
Greggs	Reasonable Pricing Strategy	Moderately Accessible to Customers	Direct
Costa Coffee	Aggressive Pricing Strategy	Customer Access is significantly low	Direct
Subway	Moderate Pricing Strategy	A high customer access is present	Direct
Tesco	Reasonable Pricing Strategy	High customer access available	Indirect

Table 1: Qualitative Overview of Competition

The competitors of Birds Bakery are identified as Gregg’s plc, Costa Coffee, Subway plc and Tesco plc. Birds Bakery operates within the crowded Food to go (FTG) sector where major players shape the market due to their influence of price strategies, customer access models and brand positioning (birdsbakery.com, 2024). This section offers a high-level qualitative view of competitors' pricing strategies, access to customers, and whether they are direct or indirect competitors to Birds Bakery, including Gregg, Costa Coffee, Subway, and Tesco.

Birds Bakery’s most direct and relevant competitor is Greggs which has a good pricing strategy that entices cost conscious consumers on less expensive FTG options. For example, Greggs’ caramel doughnut costs around £1.25 whereas Birds Bakery charges £1.45 and provides similar quality but a slightly cheaper cost. These price sensitivities have helped the majority of companies to develop a customer base loyalty, in the cost-of-living crisis (Ali and Anwar, 2021). Also, Greggs has benefited from moderate customer access on high street stores, retail parks or transportation hubs. As a direct competitor, Greggs has a nationwide coverage and considerably larger operations with 62 stores mainly across the East Midlands than Birds Bakery. Birds Bakery’s product offering includes sausage rolls, sandwiches and baked goods that are sweet and reflect the offerings in this space and strengthens the rivalry even more.

Another direct competitor is Costa Coffee in terms of beverages, cafe experience, and in store. The pricing strategy is aggressive for Costa, while the pricing is premium and it is based on the fact that Costa is a specialist coffee retailer. As per critical opinions of (Subrahmanyam and Arif, 2022), a premium pricing strategy could lead to low customer association. Costa prices a medium cappuccino at around £ 3.20 and £4.40, which is much higher than an average hot drink at Birds (costaprices.co.uk, 2025). This has appeal to a segment that will pay for the brand and ambiance, but customer access is lower compared to others like Greggs or Tesco, because of Costa’s more selective store placements occasionally in affluent or urban areas. However, Costa competes with Birds on overlapping categories like pastries and snacks and particularly in areas where Birds has a cafe set up.

MN7061 Accounting For Accountability And Decision Making Assignment Sample

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Another direct competitor is Subway, especially for filled rolls and sandwich businesses. Amidst Greggs and Costa, Subway‘s cheapness moves it in the middle like meal deals tend to cost £3 to £5, depending on size and contents. The difference is that Subway’s strong presence in every town, in city centers and service stations has brought in lots of customers. In addition, Subway also allows customers to make their sandwiches more personalised with a touch. Additionally, they also sell freshly prepared rolls to offer as well but these ones are prepackaged in store and not made to order hence allowing a lesser amount of customisation (subway.com, 2024). Birds’ freshness and local ingredients selling point nevertheless sets it apart from Subway’s greater reach.

Tesco, a major supermarket chain, stands as an indirect competitor but still poses significant market pressure. Often, Tesco’s pricing strategy is reasonable where a pack of five custard doughnuts for £1.15 is cheaper than one at Birds Bakery or Greggs. Very high customer access continues to benefit Tesco owing to its wide footprint across the UK in its Express, Metro and Superstore format (tesco.com, 2024). Tesco’s food is generally fresh but not freshly made or artisanal like Birds’, but their pricing with convenience is surely suited for an everyday customer. In the current economic climate consumers are increasingly budget conscious and one area, in which Tesco cannot be ignored, is in sweet baked goods where the vast majority of the market (over 70%) is made up of “own label” products.

FTG sector where Birds Bakery directly competes with Greggs, Costa and Subway who each dominate the field through value, premium experience or customisation. Tesco, an indirect rival, dominates with affordable bakery options. Knowing these dynamics will allow Birds to decide where to invest its money on branding, tech and service in order to strengthen its market position.

2.1.2: Quantitative Overview

The quantitative overview of competition applicable for Bird Bakery UK can be determined through financial ratio analysis divided across four metrics. The following is an individual analysis of financial performances for the selected companies in which the period of assessment is considered from 2022 and 2021. The quantitative overview through ratio analysis will be framed by encapsulating input data for Birds Bakery and identified competitors Greggs, Costa Coffee and Tesco.

Profitability Ratios

According to the above figure of profitability ratios, “operating profit margin” for Greggs Plc is identified to be relatively higher among the selected companies. The corresponding ratio identified for Greggs in 2022 is measured as 10.21%. The lowest “operating profit margin” is identified for Tesco in 2022 which carries a numerical expression of 2.32%. The above trend of “operating profit margin” also signifies decreasing growth patterns for all companies in 2022 as compared to 2021. This decrease is mainly fuelled by decreasing operating profits which are mainly observed on account of incremental operating expenses borne. As per critical illustrations and narratives of Rafid et al. (2024), a decreasing position of “operating profit margin” can be an inflicting proposition for an organisation due to which future operational reliability might be jeopardised.
The second ratio calculated is the “return on equity” in which the highest figure for 2022 is observed for Greggs Plc and the lowest figure is observed for Birds Bakery. The corresponding numerical expressions of the highest and the lowest “return on equity” in 2022 are 26.97% and 4.68% respectively. In terms of ratio growth, positive growth trends are observed for Birds Bakery and Greggs in 2022, whereas adverse growth trends are observed for Costa Coffee and Tesco respectively. The low value of “return on equity” for Birds Bakery is mainly determined in terms of low net profits generated in 2022 as compared to 2021. (Rashid, 2021), critically illustrated that a low position of “return on equity” can create passive participation from investors on account of low available returns that could be generated by undertaking investments in a company. Based on the overall analysis, it can be dissected that the profitability positioning of Birds Bakery in recent times is inferior to Greggs Plc and is moderately superior when compared to Tesco and Costa Coffee.

Liquidity Ratios

From the above figure of liquidity ratios, “current ratio” of Birds Bakery is identified to be the highest amongst all four companies while the lowest ratios are identified for Tesco Plc. The corresponding figures of the highest and lowest “current ratios” are represented as 9.51:1 and 0.71:1 respectively. In terms of annual growth trends, incremental movement is observed for Birds Bakery and Costa Coffee whereas decreasing movement are observed for Greggs Plc and Tesco respectively. The main causes of growth in “current ratios” for Birds Bakery can be attributed to increasing current asset values in 2022. As illustrated by Lalithchandra and Rajendhiran (2021), an increasing “current ratio” is a beneficial position for a company where working capital prosperity is obtained to facilitate operational streamlining.

Similarly, the above figure demonstrates highest “quick ratios” for Birds Bakery in 2022 while the lowest figures are observed for Tesco Plc. The figures corresponding to highest and lowest “quick ratios” are denoted as 9.30:1 and 0.56:1 while an incremental performance growth momentum is observed for Birds Bakery and Costa Coffee. The decreasing growth trend of “quick ratio” is observed for Greggs Plc and Tesco Plc and main reasons attached with growth involves increase in current asset values for Birds Bakery in 2022. As per opinions of Jihadi et al. (2021), an increasing “quick ratio” demonstrates higher availability of liquid financial assets which can aid a company to hold high cash reserves and facilitate reliable contingency planning. The overall liquidity position of Birds Bakery in 2022 is deemed the best performing in comparison to its competitors. A superior liquidity position for a company is also instrumental for driving incremental cash flow which can meet operational and funding requirements in the long run (Susellawati et al. 2022).

Solvency Ratios

According to the above figure of solvency ratios, “gearing ratio” performance of Tesco Plc is considered to be the highest in 2022 while the lowest performance is obtained for Birds Bakery. The numerical figures corresponding to highest and lowest “gearing ratios” in 2022 are calculated as 0.57 times and 0.05 times respectively. In terms of analysing the annual growth trends, incremental Trends are observed for Greggs Plc, Costa Coffee and Tesco Plc while a decreasing performance movement is observed for Birds bakery in 2022 as compared to 2021. The causes for a low and an underwhelming “gearing ratio” can be identified in terms of low debt values available to Birds Bakery in comparison to its competitors. As Blessing and Sakouvogui (2023), critically viewed and idealised that a low position of gearing for a company can sacrifice financial leverage due to which incremental scope of attracting investors can become a difficult proposition.

On the basis of identifying the above performances of “interest cover ratios” the best performing and the worst performing companies in 2022 are identified as Greggs Plc and Costa Coffee respectively. The figures corresponding to highest and lowest “interest cover ratios” are calculated as 25.31 times and 1.69 times respectively. In terms of analysing yearly growth trends of “interest cover ratios”, an increasing growth trend is only observed for Greggs Plc while a decreasing growth trend in 2022 is available to Birds Bakery, Costa Coffee and Tesco Plc respectively. The reasons associated with incremental interest coverage ratio performances can be linked with increasing operating profits obtained by Greggs Plc in 2022. As per opinions and expressions of Fikri and Yolanda (2023), a high “interest cover ratio” is a beneficial indicator that signifies sufficient funds available to a company if immediate interest payments are needed to be facilitated on behalf of loans borrowed. The overall solvency ratio position of Birds Bakery is therefore identified to be significantly lower in comparison to its other three competitors in recent times.

Efficiency Ratios

According to the above figure of efficiency ratios, the highest and lowest values of “receivable turnover” are recognised for Birds Bakery and Costa Coffee respectively in 2022. The corresponding numerical expressions of “receivable turnover” are identified as 172.86 and 13.36 times respectively in 2022. In terms of measuring annual growth trends, an increasing movement is observed for Birds Bakery, Costa Coffee and Tesco Plc in 2022 why the decreasing movement is observed for Greggs Plc. The main reasons attached with increasing “receivable turnover ratios” involve increasing revenues and decreasing receivables for Birds Bakery. As Chairunisa et al. (2023), illustrated and opined that an increasing position of “receivable turnover” is beneficial for a company to fasttrack collections for improving financial liquidity for operations.

The second ratio is the “payable turnover” in which the highest and the lowest figures are identified for Birds Bakery and Costa Coffee in 2022. Corresponding numerical expressions are measured as 7.91 and 2.80 times respectively and an increasing performance movement is observed for all companies on account of “payable turnover”. The main reasons associated with increasing growth trends in “payable turnover” are linked with increasing cost of sales and decreasing trade payable values recognised by Birds Bakery in 2022. Murrar et al. (2024), illustrated and narrated that an increasing position of “payable turnover” is perceived as a beneficial indicator in which prompt supplier payments can be facilitated due to which cordial vendor relations are established. Based on the overall analysis of efficiency positioning, performance of Birds Bakery is significantly superior in comparison to its competitors. A superior efficiency ratio performance is also considered beneficial for a company due to which operational conditioning and strength could be garnered by ensuring proper utilisation and management of available assets and liabilities (Alarussi, 2021).

2.2: Potential Areas of Investment

2.2.1: Machinery and Construction

Birds Bakery is very reliant on a centralised production facility siting at Ascot Drive, Derby. The equipment at the facility includes large scale baking equipment and a doughnut maker, most work, including product finishing such as icing, still comes with manual intensity (Owusu-Apenten and Vieira, 2022). However, one would gain a handcrafted, quality driven brand identity but at the same time loses production scalability and efficiency. Changing existing machinery to more energy efficient and automated ones reduces labour costs and increases throughout to a significant extent (Petroutsatou and Giannoulis, 2022).

Industry insights indicate that if the equipment is modernised, bakeries can reduce production time by 20-30 percent, but hygiene and compliance will improve. This also fits with the sustainability goal of using newer machines which are typically more energy efficient. With Birds looking to grow its delivery footprint and minimise the need for human labour, it will be necessary to invest in new infrastructure, including oil saving ovens, refrigeration machines and storage rooms. Shelf life could be improved, and a broader product portfolio could also be achieved by upgrading production lines to include frozen or partially baked products that would lend themselves to broader distribution (Liu and Zhao, 2022).

2.2.2: Continuation of Rebranding

The brand identity for Birds Bakery’s new name and identity, which launched in January 2024, started when it opened its Ashby store. The rebrand reflects freshness, local sourcing and community engagement in a product display refresh with a fresh spring green and grey color scheme, cafe seating areas and, above all, the freshness of the product itself (Tsykhanovska et al. 2022). The store appearance has become much more modern while the rebranding has signalled the unique values of Birds-family heritage, freshness and the trust of customers (Beise-Zee, 2022).

This will continue the transformation of the rest of the stores and will further strengthen the unified brand experience. Because they rebrand, improve in store and customer experience as well as brand recognition on social media and delivery platforms. Consumers link up brand image with quality and reliability, Birds will always be worthwhile investing in rebranding to remain relevant to younger demographics and to differentiate against competitors of the likes of Greggs and Tesco (Soegoto, 2021). Moreover, stores that have been rebranded can include pet friendly policy, social messaging and interactive content to increase footfall and loyalty (Xu, 2024).

2.2.3: Investment in IT and Technology

Birds Bakery is not entirely digital but they have ventured into the digital channels with the likes of Just Eat, Uber Eats and improving its website and the social media presence (Lord, et al. 2023). Nevertheless, much more investment in IT infrastructure is necessary to sustain the competitiveness in the developing FTG market. Digital transformation could also consist of upgrading the POS (Point of Sale) systems, introducing mobile ordering as well as such a dedicated loyalty app.

Customer analytics and CRM (Customer Relationship Management) software can reveal information on purchasing behaviour that can be used to shape up promotions and products. Birds’ partnership with ‘Too Good To Go’ can be supported by Artificial Intelligence in its inventory management and waste reduction. In addition, such smart baking technologies as IOT enabled ovens and ovens are able to improve the precision and energy use in the baking process (Cappelli and Cini, 2021).

McKinsey reports that with integrated digital systems, bakery businesses suffer an average 15 pence per bag of profit margin. Birds can increase order accuracy, as well as online and offline sales channels and improve customer experience, by increasing IT capabilities (Lakhno et al. 2022). Thus, digital investment is a short- and long-term strategic priority.

2.2.4: Investment in Human Resources

Birds Bakery employs over 699 individuals across production, sales, and administration. Employee engagement and productivity are of the essence to the operational success with 528 staff in the sales roles alone (Šebestová and Popescu, 2022). HR’s investment should be on training their staff, upskilling and retention initiatives. Structuring your systems such as new POS tools will dramatically increase the quality of customer interactions.

Additionally, helping to keep talent and reducing recruitment costs is another option. So, for Birds it would improve internal communication, would performance incentives through bonuses etc go away, as well as fostering a strong organisational culture can boost morale and service quality that helps them compare with brands such as Costa Or Pret.

2.2.5: Suggested Areas of Investment

Machinery and Construction

The first suggested area of investment is identified as machinery and construction which is believed to have strategic benefits as well. The future demand for FTG products is expected to reach a total market share of 23.9% by 2026, which places great pressure on Birds to scale up appropriately (store.lumia-intelligence.com, 2024). Birds started working on reducing downtime and waste by incorporating Industry 4.0 technologies such as smart sensors to monitor oven temperatures, automated inventory tracking, etc. Green subsidies may also be given to the investment in energy efficient machines (Petroutsatou and Giannoulis, 2022). With construction, a larger cold storage expansion or upcoding the shop kitchens may help enhance the range of menu. These upgrades have enabled competitors such as Greggs to introduce new products and make service more streamlined quickly. The changes not only maximise the output but also ensure product quality and safety.

Investment in IT and Technology

The second suggested area of investment is identified as investment in IT and technology which can obtain AI based forecasting tools as well as tools that can automate inventory management for demand planning right from the start of the ride to the place of delivery. QR based menu, Mobile Payment, Personalised email marketing can be used to enhance the customer journey by a company (Novotná et al. 2021). With delivery and online engagement exploding, the idea of real time integration of the production system to the sales system on the front end becomes crucial. Analytics tools can also be used by Birds to quietly track the social media performance, customer feedback and football patterns to fine tune campaigns and store. FTG and cafe sectors in the UK are becoming digitally competitive and therefore a strong IT infrastructure will be essential for the UK's market share to remain and secure growth.

2.3: Analysis of Return on Investments

2.3.1: Assumptions

• The period of investment in machinery and construction as well as investment in IT and technology is 5 years starting from 2024.
• The expected average selling price per food item is assumed as GBP 1.25 with an expected increase of 4% anticipated from year 3 and onwards.
• The projected number of items planned to be sold in year 1 is considered as 1 million with an expected increase of 6% projected from year 2 and onwards.
• Variable cost per unit in year 1 is considered as GBP 0.80 per item, while an anticipated increase of 7% in variable cost per item is projected from year 2 and onwards.
• Fixed costs are considered as 30% of revenues, which is expected to remain uniform all throughout the project life cycle.
• The cost of capital will be determined through WACC analysis by taking 2022 figures in which beta of Birds Bakery is assumed as 0.95. The cost of equity will be subject to computations by considering risk free rate and market risk premium in the UK during 2023.

2.3.2: Cash Flows

According to the above figure of cash flows, numerical expressions of GBP -1,000, 000 are observed as initial investments. According to Pereira et al. (2024), the initial investment value in cash flows is a major area which elaborates the quantum of investments intended to be made by a company to achieve future goals and objectives. Similarly, the cash inflows from years 1 to 5 are observed as GBP 375,000, GBP 397,500, GBP 438,204, GBP 438,204 and GBP 552,543.08. Therefore, based on the above figures drawn, the anticipated cash flows of the investment in machinery, construction, IT and technology are observed to have an incremental growth trend. As per statements and expressions of Karnavas (2024), the availability of incremental cash flows is beneficial on part of a company to illustrate financial wellbeing and credibility over a prolonged period of time. The availability of incremental cash flows is also essential on part of a company to generate a high value of prospective investment returns during the stipulated completion period (Verma et al. 2021).

2.3.3: Cost of Capital

According to the above cost of capital, the rounded off weighted average cost of capital has been measured as 5% for Birds Bakery. In order to calculate weighted average cost of capital, the applicable risk-free rate has been taken as 3.50% (kroll.com, 2022). Correspondingly, the market risk premium in the UK for 2022 has been considered as 6.10% (bvresources.com, 2022). Based on the above figure of cost of capital, it can be observed that a relatively low figure is present for Birds Bakery after considering influences of debt and equity as key capital structure sources. Zhang et al. (2021), explained that a low cost of capital is viewed as a reliable metric due to which higher investment returns could be generated by a company, if undertaken in the long run.

2.3.4: Payback Period

According to the above figure, the payback period of investment in machinery, construction, IT and technology is measured as 2.52 years which signifies recovery of initial investment before investment duration. Imteaz et al. (2021), viewed that a low payback period is deemed beneficial for a company due to which a higher cash flow mobility could be facilitated in an investment. The low figure of payback period is also complemented in terms of Birds Bakery expected to achieve positive cumulative cash flows by 3rd year on account of increasing cash flow trends observed. The payback period method of appraisal analysis is vital to determine initial investment viability due to which long-term projections could be anticipated thoroughly (Shah et al. 2023).

2.3.5: Accounting Rate of Return

The above figure expresses, accounting rate of return of 44.53% by considering cash flows expected to be generated and used in the investment. According to Nukala and Prasada Rao (2021), the formula applicable for accounting rate of return is considered as the division of initial investment with respect to average cash inflows. The above figure represents a higher value due to which superior initial investment profitability is potentially guaranteed for Birds Bakery. As Brealey et al. (2023), narrated that a superior initial profitability from a project is also considered as an important area of consideration due to which a reliable investment momentum could be garnered in future.

2.3.6: Return on Investment

According to the above figure, return on investment in machinery, construction, IT and technology has been calculated as 22.63% for Birds Bakery. The return on investment is formulated by dividing initial investment from terminal cumulative cash flow (Connor et al. 2023). Based on the above figure identified, a superior and a positive return on investment is likely if the investment is undertaken. As per opinions of Sah et al. (2022), a positive return on investment is considered beneficial on part of a company to gain significant monetary growth from an investment due to which future sustainability could be leveraged.

2.3.7: Net Present Value

According to the above figure of net present value, numerical expressions of GBP 910,913.50 are identified for Birds Bakery if the investment is accepted. The net present value method of appraisal is perhaps the most important parameter for selecting investments in which time value of money is considered by applying cost of capital Abdelhady (2021). The identified numerical expression is deemed positive and fruitful for Birds Bakery due to which extensive monetary returns can be obtained by investing in the identified sectors or areas. Kasprowicz et al. (2023), illustrated that a superior net present value from an investment is also beneficial for a company to undertake more investment opportunities in future for maximising monetary worth.

2.3.8: Internal Rate of Return

According to the above figure, the internal rate of return is calculated as 31.74% for Birds Bakery. According to Jurčević et al. (2022), the internal rate of return method establishes a relationship between cash flows in order to compare with cost of capital for determining potential investment risks applicable. The identified numeric expression of internal rate of return is considered to be higher than the cost of capital of 5% which suggests negligible risks available to Birds Bakery if investment in the targeted areas is accepted. As illustrated by Hayley and Sefiloglu (2023), a higher internal rate of return also signals high potential of profitability for an investment which can fetch long-term guaranteed returns.

2.3.9: Benefit Cost Ratio

The benefit cost ratio includes a numeric value of 0.91 times for Birds Bakery if investment is considered across the identified areas or sectors. As per expressions of Cotter (2021), the benefit cost ratio is formulated by dividing initial investment with net present value of an investment. The identified numeric expression indicates a high benefit proportion which thereby suggests high profit quantum available from the investment. As per opinions of Wang et al. (2023), a high benefit cost ratio is also deemed fruitful for a company to energise investment mobility which translates into perpetual financial sustainability.

2.3.10: Modified Internal Rate of Return

The modified internal rate of return includes a numeric expression of 19.52%. This method of investment appraisal is an extension of the internal rate of return in which the cost of capital is used as a financing and as a reinvestment rate (Xie and Chen, 2021). The identified numeric expression is also superior to the cost of capital which also signals sufficient financial coverage likely to be held by Birds Bakery. As Babaei and Jassbi (2022), expressed that a high modified internal rate of return from a project also benefits an organisation in terms of eliminating economic risks from investments due to which a better return proponent can be obtained.

3: Conclusion and Recommendations

3.1: Conclusion

This report has signified that Birds Bakery is a renowned FTG organisation whose unique selling point lies in applying a traditional approach while blending it with modern business management techniques for achieving a higher market position. The competitor analysis section in this report is mainly adjudicated in terms of quantitative performances where liquidity and efficiency position of Birds Bakery is the highest, while a moderate and a low position is established for profitability and solvency parameters. The main areas of investment are selected as machinery and construction as well as IT and technology due to which advanced kitchen setups and a better customer interaction platform could be facilitated. The return on investment appraisal analysis indicates superior and positive attributes of investment due to which extensive business sustainability could be achieved by Birds Bakery in future.

3.2: Recommendations

Based on the above return on investment analysis conducted, this new investment in machinery, construction, IT and technology should be chosen by the managerial board of Birds Bakery. This recommendation is justified in terms of obtaining superior net present values, higher internal and modified internal rate of return in comparison to cost of capital and due to a relatively low investment payback period in comparison to total duration of five years. Subsequently, the return on investment, accounting rate of return as well as the benefit cost ratios also support acceptance of investment on grounds of higher figures achieved in favour of Birds Bakery in the identified areas of investment. Additional recommendations offered to the managerial board of Birds Bakery are expressed in terms of qualitative competitor comparison where revision of product pricing strategy and ways to obtain a high customer accessibility must be identified.

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