Academic Report and Financial Calculations 04033 Essay

Academic Report and Financial Calculations 04033 - Essay Example Its appropriateness is examined and the benefit is extracted so as to decipher whether it is acceptable by the company in the present situation (Schlingemann, Stulz and Walkling, 2009; Valipour, Moradi and Farsi, 2012). This is essential for developing a strong business relation between the suppliers and companies. The suppliers should abide the policies that are followed by the company. Similar case is seen in the case study of LJC Ltd. LJC Ltd is fruit and vegetable supplier, who aims at delivering value and good quality handpicked fruits and vegetables to the small retailers. Though it is a family run business, but it has seen success in the past 80 years through their business operation as a constant effort to connect to big companies. LJC Ltd is trying to negotiate with the small supermarket chain known as Co-share for the past twelve months. The deal is to manage the fruit and vegetable packing and distribution of Co-share. Co-share has 160 stores that are operating in South East and Midlands. The company is very strict regarding the business ethics and the fair trade policies. For LJC Ltd, the contract will increase the volume of products, which are managed by the business. In order to assist Co-share in their business, LJC Ltd has to use fair trade products and develop best HR practices such as equality policies and staff development. Project A and B is evaluated for identifying the best project for LJC Ltd. Payback period is the span of time, which is required for recovering cost of investment that is made by a company (Valerie, Cook and Ali, 2010; Marić, Kamberović and Radlovacki, 2011; Amihud and Mendelson, 2010; Arshad, 2012; Easley and O’Hara, 2009). As per Appendix 1a, it is observed that the project A will incur positive cumulative cash flow in the third year. Therefore, payback is calculated on the basis of the positive cash flow that is incurred from the project. The cumulative cash flow at the end of 4th year is  £ 60500. Therefore, by