Assuming the highest volume of new trainees (8,000 vs 5,000 and 3,000) - is this fair to assume this/is it too optimistic of an assumption?

Veracity of the external data source and the assumptions for course fees/number of trainees

The payback period is already longer than the accepted 3 years, if CoC increases, the payback period will further extend

NPV is the absolute measure of profitability, if we are not using this method, why is payback preferred, on who's authority?

Payback is based on a scenario of 8,000 trainees, if this highest forecast is unreliable the payback period will also increase

Non-Financial

The forecast is based on external data which may not be suitable and reliable for our investment making decision process

• Payback is below target - could lead to liquidity issues (esp as did big dividend payout last year)

• Used best-case demand scenario so risk of actual demand coming in under this. How confident are we only the underlying probabilities / this deciison

• Use our 'usual cost of capital' - is this relevant to this decision

Non- financial:

• No info into customer perception of this expansion

• No info into employee / franchise accaptance / willingness to buy into this

• Cheaper source of finance (interest tax deductible)

• Can match timescale for project

BUT

• Higher geraing = difficulty securing SHs leading to higher cost of equity

• May come with requirements

Rights issue

• No transaction fees required to be paid

• Easily acquired - no need to approach external providers

BUT

• Effect on shareholdings long-lasting

• More expensive - dividends not tax deductible