Pizza Hut SWOT analysis

SOWT analysis
The SWOT analysis helps organizations assess issues within and outside the organization. The SWOT analysis, made up of an assessment of strengths, weaknesses, external opportunities and threats from competition, provides an outline for strategic decision-making.

Small businesses, large corporations and individuals can utilize the SWOT analysis process for evaluation. By adding a SWOT analysis in their business plans, small businesses can better clarify their short- and long-range strategies. The SWOT analysis, often found in marketing plans, becomes a useful tool for planning and competitive analysis. Organizations often provide a SWOT analysis in a chart format with each segment represented in a different quadrant.

SWOT analysis of Pizza Hut
In every business company should have SWOT analysis tool, it could analyze strength, weakness, opportunities and threat in every organization. Based on the question pizza hut is a business company therefore it have the SWOT analysis for the product or the services.

The SWOT analysis for pizza Hut Bahrain:-
Strengths
• Pizza Hut are specialize in pizzas.
• Pizza Hut doesn’t have any pizza’s competitors and they face very low competition in the market.
• It is the leading brands of the pizza.
• Pizza Hut is well known by everyone no matter is eldest or younger.
• In every country they also have their own outlet and store.
• It is a place suitable for family dining
• there are set for family and individual with reasonable price
• Pizza Hut has their own full service restaurant and delivery services compare to others Fast Food Company.
• there have their own loyal customer
• Pizza Hut have a large market share and have a strong network compare with other fast food restaurant.
• Pizza Hut also has a strong advertisement and many media help to attract people
• Pizza Huts store outlets in Bahrain have many ideas for the pizza.
• Every few months or seasons, it will come up with many flavor of the pizza and it will attract more customers to try the new thing.
• Strong franchisees networking
Weakness
• Communication skills between worker and customer are bad
• Customer service are not meet customer expectations
• Food is not fresh enough
• Need to wait very long to be served even is wait to be seated or take order from customer
• Not in time to deliver the pizza
• Loyal customer is declining because of the satisfaction of the pizza
• sometimes the food are not meet the guest expectations
• Lack of innovation
• Internal factors among the franchisees
• The menu is complicated because there are not only pizzas but other variety of foods.
• Pizza hut delivery have charges but other competitor don’t have
• Pizza Hut face higher overhead of costs to deal with while other competitors don’t have to
Opportunities
• Although they have many outlets around the world but they can explore a new market and gain opportunities
• Pizza Hut should create different flavor and different crust size
• New product development can increase their market share
• Create a new pizza flavor such as Thailand tom yam
• Pizza hut can focus on eastern taste because there are more focus on western taste
Threat
• There are many pizza competitor in the market
• Domino pizza is the large competitors to Pizza Hut because they provide a good and efficient delivery.
• Cheese cost are increasing therefore the price of pizza will increase too
• Under independent restaurant can influence pizza hut market share because there are sell pizza with lower price
• Location is an important thing because not every location have the potential customer to afford the meal

Conclusion
Pizza Hut SWOT analysis there will a few part like strengths that say that how the advantages give the Pizza Hut in market and weaknesses that give disadvantages to Pizza Hut market. There also opportunities like how we can have a chances to our business and threats that that have make our business in trouble. The franchises market share status for Pizza Hut is in first place at the year of 2010. Meanwhile, Domino’s Pizza is at second place and Papa John’s Pizza is at third place.

Knowledge Management For the project team

Knowledge Management For the project team
Knowledge Management
Knowledge management is the systematic management of an organization’s knowledge assets for the purpose of creating value and meeting tactical & strategic requirements; it consists of the initiatives, processes, strategies, and systems that sustain and enhance the storage, assessment, sharing, refinement, and creation of knowledge.
Knowledge management (KM) therefore implies a strong tie to organizational goals and strategy, and it involves the management of knowledge that is useful for some purpose and which creates value for the organization.
Introducing Knowledge Management

Knowledge management is essentially about getting the right knowledge to the right person at the right time. This in itself may not seem so complex, but it implies a strong tie to corporate strategy, understanding of where and in what forms knowledge exists, creating processes that span organizational functions, and ensuring that initiatives are accepted and supported by organizational members. Knowledge management may also include new knowledge creation, or it may solely focus on knowledge sharing, storage, and refinement. For a more comprehensive discussion and definition, see my knowledge management definition.
It is important to remember that knowledge management is not about managing knowledge for knowledge’s sake.
The overall objective is to create value and to leverage, improve, and refine the firm’s competences and knowledge assets to meet organizational goals and targets. Implementing knowledge management thus has several dimensions including:
• KM Strategy: Knowledge management strategy must be dependent on corporate strategy. The objective is to manage, share, and create relevant knowledge assets that will help meet tactical and strategic requirements.

• Organizational Culture: The organizational culture influences the way people interact, the context within which knowledge is created, the resistance they will have towards certain changes, and ultimately the way they share (or the way they do not share) knowledge.

• Organizational Processes: The right processes, environments, and systems that enable KM to be implemented in the organization.

• Management & Leadership: KM requires competent and experienced leadership at all levels. There are a wide variety of KM-related roles that an organization may or may not need to implement, including a CKO, knowledge managers, knowledge brokers and so on. More on this in the section on KM positions and roles.

• Technology: The systems, tools, and technologies that fit the organization’s requirements – properly designed and implemented.
• Politics: The long-term support to implement and sustain initiatives that involve virtually all organizational functions, which may be costly to implement (both from the perspective of time and money), and which often do not have a directly visible return on investment.
Typically, failed initiatives have often placed an undue focus on knowledge management tools and systems while neglecting the other aspects. This issue will also be addressed throughout the site, and particularly in the knowledge management strategy section.
At this point, the articles presented on this site focus on the first five dimensions. Originally, I had deemed the political dimension to be beyond the scope of this site, since it is not something that is commonly tackled in KM literature. However, I will add a section on the political aspect of KM in the future.
Throughout the site, I will explain and discuss known theories, occasionally contributing with some of my own frameworks. I will also discuss the potential role of knowledge management systems from a broad perspective, and in the section on KM tools I will provide specific advice on this topic. I have tried to organize the site as logically as possible, moving from a general introduction to knowledge and KM to introducing key subjects like organizational memory, learning, and culture. The later sections discuss several models and frameworks as well as knowledge management initiatives, strategy, and systems, before finally presenting an overview of various tools and techniques

Project management is the process of analyzing, planning, organizing, monitoring and managing resources to bring out the successful completion of specific project and customer satisfaction.
A project manager takes responsibility for planning and managing to deliver success on a project. The role of the project manager is to ensure the mixing of management process and manage through project management cycle that leads to the successful completion of the project. Project manager must be able to encourage and keep up people. Project team members will look to the project manager to solve problems and help with removing obstacles. In simple words, a good Project manager must be able to
• Deliver projects on time
• Deliver projects within cost
• Deliver projects within scope and
• Meet customer quality requirements
• Some of the activities of the good Project manager
• Define the project
• Reduce the project into set of understandable modules
• Form a group of team to complete the task
• Allocate resources based on the module Complexity.
• Motivate and encourage his team to complete the task on time
• Must evaluate and analyze the risks of the project and reduce them.
• Must be able to adapt and manage any change in the project.
Skills needed for a Good Project Manager
Leadership:
A project team needs the way for the life of the project and the project manager is the responsible for leading the team to achieve the goal of the project. A project manager achieves this by coordinating and motivating the team members.
Project leading is the key role, it involves with others to achieve the success of the project. The leading includes the effective of facilitate and motivate- this will conclude the ability of the project manager.
People Management:
At the time of project planning and development, the manager has to meet the various kinds of people like customers, suppliers, functional managers and project team members. The role of the manager is to satisfy the all kind of people to bring the successful completion of the specific project.
Effective communication:
The communication is plays an essential role in the project management. The verbal and written communication is vital in project management that enables a project manager to convey project information in a way that it is received and understood by all project team members.
Communication is only successful when both the sender and receiver understand the information.
Conflict management:
Conflict occurs when two or more people against one another because their needs, wants, goals, or values are different. Conflict management is the practice of identifying and handling conflict in a wise, reasonable, and well-organized manner. Conflict management requires such skills as efficient communicating, trouble solving and negotiating with a focus on wellbeing.
Planning:
The planning of the project involves defining about the project, fix the timeline for the project, plan about the implementation and monitor who will do it. The project manager is responsible for creating the project plans, defining about the project goals, project objectives and resources needed for doing the project
The project manager is also responsible for updating the new changes in the project plan to all the stakeholders and ensures that the changes are being incorporated in all the project activities.
Estimating:
In project management accurate estimates are the key role for sound project planning. A good project manager should be able to estimate the cost of the project and should complete the project within that estimation.
Problem solving:
All projects are level to meet problems, problems that were not identified in the risk or scope of the project and that will need to be managed accordingly, trouble solving requires a good explanation of the problem that is detected early enough to allow time to respond.
The project manager needs synthesis and analysis thinking skills. Analysis is the skill of breaking a whole project into component parts, mush like decomposing a work.
Time management:
The time management is most commonly known as project planning and project scheduling. A good manager should be able to manage the time and complete the project to achieve aim and objective and it can be delivered to client on time.
Personal skills:
The project manager must be able to motivate the team and complete the project within the timeline and estimation. The project team members will be watching all the activities of the project manager, so a manager must be sincere, clear-cut and familiar in all dealings with the people and in the project.
Project managers must be always having a positive attitude, even when there are significant difficulties or problems. Project managers are respected if they are direct, open and deal with all type of problems.
Coping skills:
A good project manager has to attain a many number of skills to cope with different situations, conflicts, uncertainty and doubts. A good project manager has a high tolerance for surprises, uncertainty and ambiguity.
Negotiation skills:
The negotiation is the procedure of accepting a mutual agreement from the group or individuals. The manager has to negotiate on behalf of association depending on the project construction and the level of manager authorization.
Conceptual skills:
Conceptual skills is the capability to organize and incorporate all the project efforts, it requires to the good project manager to see the project as a whole and not just the sum of its parts, capability to recognize how all the parts make a whole and how they all relate and depend on one another, and the ability to anticipate how a change on one part of the project will affect the entire project.
Advantages to team members when the Manager is good:
• Opportunity to learn from the Manager every day.
• A motivation to work hard and give your 200% involvement.
• Makes you feel that you are on right career path.
• Makes you feel free to discuss the task about the project.
Organizational learning
Organizational Learning is concerned with gathering of understanding through various actions or practice in organizations. Organizational Learning recommends that the employees lead learning in organizational setting, and utilize what they learn in their job. Neilson reflect on Organizational Learning as a incessant process of knowledge formation, gaining and transformation.

Knowledge management capability

The managerial capability refers to an organization’s expertise, knowledge, and familiarity, which are applied to manage complex and difficult tasks in management and creation (Choi and Shepherd, 2004). Knowledge Management Capability has been acknowledged as a fundamental feature for obtaining and supporting a competitive advantage (Corsoa et al., 2006).

Organizational Performance

Organizational Performance is an indication which evaluates how healthy an enterprise attains their goals. Organizational Performance can be evaluated by an organization’s competence and success of goal attainment stated that the idea of effectiveness is a proportion, meaning that two things are needed when explaining and assessing effectiveness. He also stated that when effectiveness is conceptualized as an extent of purpose achievement, that is, the attainment of profitability goals.

Project on Information system

Information system
Information system is the collection of technical and human resources that provide the storage, computing, distribution, and communication for the information required by all or some part of a firm. A special form of Information system is a management information system , which provides information for managing afirm

Trends of modern information system
• Converging administrative and academic solutions
• E-Business
• Alternative technology models
• Support of emerging institutional requirements using administrative systems
• Leveraging administrative systems infrastructure for strategic uses

Decision-making
Decision-making is a daily doings for any human being. When it comes to business firms, decision-making is a habit and a process as well. Effective and successful decisions result in returns, while unsuccessful ones cause losses. Corporate decision-making is the most critical process in any firm. In a decision-making process, we choose one sequence of action from a few possible replacements. In the process of decision-making, we may use many tools, techniques, and perceptions.

Information system involvement and Business Decisions
1. Programmed Decisions:
Normal decisions which for all time follow the similar agenda. Given that such, they can be written down into a series of fixed phases which anybody can follow. They might even be written as computer program.
2. Non-Programmed Decisions.
These are substandard and non-routine. Every choice is not rather the alike as any prior choice.
3. StrategicDecisions.
These influence the permanent direction of the trade
4. Operational Decisions.
Temporary decisions regarding how to be significant the plans
Information management helps daily decision making

Types of information system
Following are the types of information system
 Management Information Systems
 Decision-Support Systems
 Office Automation Systems
 Executive Support Systems
 Knowledge Management Systems
 Operations support systems, including transaction processing systems
 Marketing Information System
 Enterprise Resource Planning

There are many types of information systems, depending on the requirement they are designed to fill. An operations support system, such as a transaction processing system, converts business data (financial transactions) into valuable information.

Also, a management information system uses database information to output reports, helping users and businesses make decisions based on extracted data.

In a decision support system, data is pulled from many sources and then reviewed by managers, who make determinations based on the collected data.

An executive information system is useful for examining business trends, allowing users to quickly access custom strategic information in summary form, which can be reviewed in more detail

A marketing information system (MIS) can be used by marketing managers and researchers to manage a vast flood of information by organizing data in a logical and availableway. Over this system, a business can monitor its performance in the market and identify difficulties and opportunities with in a market

The potential usage in the business sectors
To get the maximum benefits from our firm’s information system, we have to activate all its capacities. Information systems increase their importance by processing the data from firm inputs to generate information that is useful for managing our operations. To increase the information system’s effectiveness, we can either add more data to make the information more accurate or use the information in new ways.
Communication
Part of management is gathering and distributing information, and information systems can make this process more efficient by allowing managers to communicate rapidly. Email is quick and effective, but managers can use information systems even more efficiently by storing documents in folders that they share with the employees who need the information. This type of communication lets employees collaborate in a systematic way. Each employee can communicate additional information by making changes that the system tracks. The manager collects the inputs and sends the newly revised document to his target audience.
Operations
How we manage our firm’s operations depends on the information we have. Information systems can offer more complete and more recent information, allowing we to operate our firm more efficiently. We can use information systems to gain a cost advantage over competitors or to differentiate ourself by offering better customer service. Sales data give us insights about what customers are buying and let we stock or produce items that are selling well. With guidance from the information system, we can streamline our operations.
Decisions
The firm information system can help we make better decisions by delivering all the information we need and by modeling the results of our decisions. A decision involves choosing a course of action from several alternatives and carrying out the corresponding tasks. When we have accurate, up-to-date information, we can make the choice with confidence. If more than one choice looks appealing, we can use the information system to run different scenarios. For each possibility, the system can calculate key indicators such as sales, costs and profits to help us determine which alternative gives the most beneficial result.
Records
Our firm needs records of its activities for financial and regulatory purposes as well as for finding the causes of problems and taking corrective action. The information system stores documents and revision histories, communication records and operational data. The trick to exploiting this recording capability is organizing the data and using the system to process and present it as useful historical information. We can use such information to prepare cost estimates and forecasts and to analyse how our actions affected the key firm indicators.

Information System provides the following advantages.
1. It Facilitates planning
Information System progresses the quality of plants by providing appropriate information for sound decision – making . Due to increase in the size and complexity of firms, managers have lost personal contact with the scene of operations.
2. In Minimizes information overload
Information System change the bigger amount of data in to summarized form and there by avoids the confusion which may arise when managers are flooded with detailed facts.
3. It Encourages Decentralization:
Decentralization of authority is possibly when there is a system for monitoring operations at lower levels. Information System is successfully used for measuring performance and making necessary change in the organizational plans and procedures.
4. It brings Co-ordination
Information System facilities combination of specialized activities by keeping each section aware of the problem and requirements of other sections. It connects all decision centers in the firm.

5. It makes control easier
Serves as a relationship between managerial planning and control. It improves the ability of management to evaluate and improve performance. The used computers has increased the data processing and storage capabilities and reduced the cost.
6. Information System assembles, process , stores , Retrieves , evaluates and Disseminates the information

Conclusion
Information systems are used by organizations to track, store, manipulate and distribute information to the appropriate people when necessary. Using a management information system can enable a business to streamline its operations into a cohesive functioning unit. Management information systems support business decision-making by providing management with critical data. They serve to enhance the organization’s communication, reduce human labor, support short- and long-term business goals and distribute complex information.

References

http://www.referenceforbusiness.com/small/Mail-Op/Management-Information-Systems-MIS.html#ixzz3dv8jQAHe

http://smallbusiness.chron.com/tangible-benefits-information-systems-50155.html

Impact on Oil Producers

Impact on Oil Producers
Algeria
Algeria is heavily reliant on oil and natural gas export revenues. Declining oil revenues are a complicating factor for a country which is already experiencing severe economic and social tensions and has suffered an estimated 75,000 deaths resulting from a six-year conflict with the Islamic Salvation Front and the Armed Islamic Group.

Indonesia
Indonesia’s oil revenues were expected to falland in addition to the already dire economic conditions that Indonesia finds itself in as part of the Asian economic crisis.

Venezuela
Venezuela will be hit hardest by falling oil prices because of its troubled economy. Venezuela, the world’s ninth-largest oil exporter and holder of the biggest proven oil reserves, needs oil prices at around $120 a barrel — or 50 percent higher than today — to keep its economy afloat, according to the International Monetary Fund.

Nigeria
Petroleum accounts for nearly all of Nigerian exports, with 95 percent of the country’s foreign exchange earnings and 85 percent of its total revenues coming from crude oil sales. This lack of economic diversity makes Nigeria especially vulnerable to price swings, and Africa’s largest oil producer is already showing signs of suffering.

Russia
Falling oil prices will have a less dramatic impact on the Russian economy in the near term. The country has around $450 billion in reserves to hedge some of the effects of cheaper crude, and that cash could last for up to a year.

Brazil
The price drop could also undermine Petrobras’ long-term plans for expansion. The company projected global prices would hover around $100 a barrel through 2030; a lower price would make it harder to fund new infrastructure and exploration projects.

Mexico
As in Brazil, cheaper oil could hamper the progress of Mexico’s long-awaited energy sector reforms. But lower prices could affect investor interest in the kinds of large-scale projects needed to revamp the country’s sluggish oil and gas industries.Mexico’s government also stands to lose a sizable chunk of public funding.

The Gulf States, Libya and Iran
The Middle East and North Africa contain the highest concentration of oil-dependent economies in the world. The region accounts for nearly a third of seaborne crude oil and liquefied natural gas exports. The Middle East — specifically the Persian Gulf — also accounts for the majority of OPEC production and exports. Therefore, the Middle East is the region that is most exposed to volatility in global energy markets — and the region that can cause the most variation, as seen by Libya’s production fluctuations. A sustained drop in the price of oil below $90 per barrel could jeopardize the economic stability that many of the region’s energy exporters have enjoyed following the tumult of the Arab Spring.

what is audit risk

Audit Risk is the risk that an auditor expresses an inappropriate opinion on the financial statements.
Audit Risk = Inherent Risk x Control Risk x Detection Risk
Audit risk may be considered as the product of the various risks which may be encountered in the performance of the audit. In order to keep the overall audit risk of engagements below acceptable limit, the auditor must assess the level of risk pertaining to each component of audit risk.

what is audit risk

Audit Risk is the risk that an auditor expresses an inappropriate opinion on the financial statements.
Audit Risk = Inherent Risk x Control Risk x Detection Risk
Audit risk may be considered as the product of the various risks which may be encountered in the performance of the audit. In order to keep the overall audit risk of engagements below acceptable limit, the auditor must assess the level of risk pertaining to each component of audit risk.

Explain how the degree of operating and financial leverage can change the profitability of the firm when sales levels change significantly. Use examples and explain your answers.

Operating and financial leverage both will result in the magnification of changes to earnings due to the presence of fixed costs in a company’s cost structure. Financial leverage is the enlargement on the bottom half of the income statement on how earnings per share changes in response to changes in EBIT, the pertinent fixed costs is the fixed cost of financing in particular interest. Operating leverage is the enlargement on the top half of an income statement on how EBIT changes in response to changes in sales, the pertinent fixed cost is the fixed cost of operating the business.
Operating leverage can be calculated by dividing the difference between sales revenue and variable cost by the difference between sales revenue and total costs.
If a company has $10,000 in sales revenue, $5,000 in variable costs, $2,000 if fixed costs (therefore $7,000 in total costs), its operating leverage would be ($10,000-$5,000)/ ($10,000-$7,000) =1.67. On the other hand, if that same company had $2,000 in variable costs and $5,000 in fixed costs, which results in the same total costs of $7,000, its operating leverage would be ($10,000-$2,000)/($10,000-$7,000)=2.67 (http://www.ehow.com/info).
A positive financial leverage means that the assets acquired with the funds provided by creditors and preferred stockholders generate a rate of return that is higher than the rate of interest or dividend payable to the providers of funds. Positive financial leverage is beneficial for common stockholders. For example, XYZ Company obtains a long term debt at a rate of 12%. The company can use the funds to earn an after-tax rate of 14%. The interest on debt is tax deductible. If the tax rate is 40%, the after-tax interest rate would be 7.2% [12% × (1 – 0.4)]. The difference of 6.8% (14% – 7.2%) is, therefore, the benefit of common stockholders.
A negative financial leverage occurs when the assets acquired with the debts and preferred stock generate a rate of return that is less than the rate of interest or dividend payable to the providers of debts or preferred stock. Negative financial leverage is a loss for common stockholders.

References
Brigham, E. F., & Houston, D. J. F. (2014). Fundamentals of Financial Management, Concise Edition (with Thomson ONE – Business School Edition 6-Month Printed Access Card), 8th Edition. [VitalSource Bookshelf version]. Retrieved from http://digitalbookshelf.southuniversity.edu/books/9781305217218/outline/13

Corporate Finance – Effects of Debt on the Capital Structure. Retrieved from www.investopedia.com/…/debt-effects-capital-structure.asp
What Effect Does Operating Leverage Have on a Company’s Profits? Retrieved from http://www.ehow.com/info

What is the relationship between business risk, financial risk, and beta (systematic or market risk).

Business risk is the possibility that a company will have a lower than expected profits or that it will experience a loss rather than a profit. Business risk can be influenced by a number of factors, including sales volumes, per-unit price, input costs, competition, and overall economic climate and government regulations. A business with a higher business risk should choose a capital structure that has a lower debt ratio to ensure that it can meet its financial obligations at all times.
Financial risk is the possibility that shareholders will lose money when they invest in a company that has debt, if the company’s cash flow proves insufficient to meet its financial obligations. When a company uses debt financing its creditors will be repaid before its shareholders if the company becomes bankrupt.
Beta (systematic or market risk) represents the risk intrinsic to the complete market or the complete market segment. It also represents the chance that an entire market will experience a downturn or even fail. Sources of economic risk are recessions, wars, interest rates, and natural disasters.

What are the implications of a change in the return on equity with an increase in debt financing?

When you have increased debt it will increase the leverage factor for a company. During normal or prosperous times, leverage results in exponential profit returns. During a recession leverage can result in exponential losses. Since return on equity is (earnings per share) / (book value) it should change by increased use of debt. Debt is leverage and should (if used effectively) increase the earnings a company makes without changing book value. A big debt load carries risk because of the response of leverage to the current economic conditions. An increased debt hurts ROE during a recession and benefits ROE during prosperous times. The main benefit of increased debt is the increased benefit from the interest expense as it reduces taxable income. But it would not make sense to over load a company with debt. With an increased debt load the following occurs:
Interest expense rises and cash flow needs to cover the interest expense also rise.
Debt issuers become nervous that the company will not be able to cover its financial responsibilities with respect to the debt they are issuing.

1.What are the pros and cons of the decision rules for the NPV, the IRR, the MIRR, and the payback methods? Which is the most accurate method and why?

The Net Present Value (NPV) is maybe the most commonly used technique for evaluating a potential investment opportunity. Using this technique all cash flows in a business case at the opportunity cost of capital. The pros- accounts for the fat that the value of a dollar today is more than the value of a dollar received a year from now- that is the time of money concept. Another pro is that is that it recognizes the risk associated with future cash flow, its less certain. Cons- is that it does not give visibility into how long a project will take to generate a positive (NPV) due to the calculations simplicity. One other drawback is that the model assumes that capital is abundant- that there is no capital rationing.

The Internal Rate of Return (IRR) or discounted cash flow rate of return gives analysts a way to quantify the rate of return provided by the investment. The internal rate of return is defined as the discount rate where the (NPV) 0f cash flows are equal to zero. The pros- is mainly accepted in the finances as a quantified measure of return and it’s also based on discounted cash flows- so accounts for the time value of money. When it is used correctly it can provide excellent guidance on a project’s value and associated risk. Cons- There are three, one is multiple or no rates of return, two changes in discount rates and three IRRs do not add up.
The Modified Internal Rate of Return (MIRR) assumes that positive cash flows are reinvested at the firm’s cost of capital, and the initial outlays are financed at the firm’s financing cost. Therefore, MIRR more accurately reflects the cost and profitability of a project. Cons-the MIRR overcomes the reinvestment assumption of IRR and serves as a much better metric for ranking projects. The cons of MIRR are that it requires two inputs not required by IRR: the reinvestment rate and the finance rate. But the result is far more meaningful. It allows comparisons among projects with widely different patterns of cash flows.
The Payback Method will allow a company to see how rapidly a project returns the initial investment back to the company. In general companies establish rules around payback when evaluating a project. Pros- it will allow for an easy understanding by management and stakeholders of when the initial investment will be recovered. Cons- It does not take into account the time value of money. Discounted cash flow should be the preferred way to evaluate payback since it does recognize the time value of money.
Conclusion
Even though the (NPV) and (IRR) methods yield better decision making data based on them being leading edge capital budgeting techniques, the payback method is not without reason. The payback method is a quick and easy way to filter a project to see if the time should be spent to further analyze whether the project should move forward. The (NPV) and (IRR) methods both give good accept reject results. Nevertheless, (IRR) is the preferred method by most since its results are portrayed in rates of return, which most financial managers see as illustrative across the board.

Sunk costs are costs that have already been incurred without prospect. Because they are in the past they cannot be changed by the decision to accept or reject the project. Sunk costs are not incremental cash outflows.
Pertinent cash flows are inflows and outflows of cash whose inclusion or exclusion from investment appraisal can affect the overall investment decision. Which means that finance or funds have already been committed will not be considered while performing your capital budgeting. Once the company incurred the expense, the cost became irrelevant for any future decision.

References
Brigham, E. F., & Houston, D. J. F. (2014). Fundamentals of Financial Management, Concise Edition (with Thomson ONE – Business School Edition 6-Month Printed Access Card), 8th Edition. [VitalSource Bookshelf version]. Retrieved from http://digitalbookshelf.southuniversity.edu/books/9781305217218/outline/12
Benefits Realization and Business Cases. Retrieved from http://benefitsrealization.blogspot.com