Gangoo Gangoo Juice sells beverages and operates its store in Ipoh. After operating for three years, the management felt that it is time for the business to upgrade the product and services. The first major upgrade that will involve RM80,000 investment is to renovate the store for the purpose of creating a tropical theme that will give an interesting experience to its customer. The second major investment is to replace the current juice maker machines with two large new juice machines totaling RM20,000. The new machine is expected to decrease serving time as many processes will be automated. These efforts are expected to increase the number of customers and thus improve sales. The owner of the business still has doubts over the success of the project because the manager who made the proposal failed to provide the potential financial outcome. The proposed plan was made entirely based on expected customers preference obtained from social media observations. The absence of possible financial impact and the unpredictability market condition creates a dilemma of whether to proceed with the investment or to remain the current state of operation. The owner also understands that a decision must be made quickly to avoid any missed opportunities. 

Explain to the owner of the business about how to use financial management techniques to make long term capital investment decisions by providing comprehensive examples and explanation on the financial techniques to be used. Include in your explanation the potential cost, current market situation and the possibility of the project to become successful.

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Here is how I would advise the owner to use financial management techniques to evaluate the proposed ... View the full answer