The Business Game applied to investment appraisal allows the student to make strategic management decisions in a simulated environment or "business laboratory".
These decisions involve critical management actions such as increasing: capital, market share, unit prices; or a decrease in costs that will have an impact on Net Present Value (NPV), Internal Rate of Return (IRR), Pay-back Period and Break-even Point (B/E).
The method to calculate NPV, IRR, Pay-back Period and B/E is as shown in Module 5 throughout.
The methodology of analysis to arrive at the target values of NPV, IRR, B/E and Pay-back Period is built by comparing, case by case, these target values with the values of the same variables in the baseline case, entering the amounts to be changed in the cash flows and using The Business Game to obtain the new target values.
The Business Game performs simulations of changes in capital, market share, increase in unit prices and cost reduction. The simulations are intended at reaching selected targets of NPVs, IRRs, B/Es and Pay Back
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