ACC707 Accounting and Finance Assignment Questions : Evaluating Investment Decisions, Budgeting Strategies, and Financial Performance Analysis

Post Graduate Diploma in Management Studies and Leadership Assessment Kit

Purpose of the Assessment

The purpose of this assignment is to test communication skills together with the ability to analyse, to interpret and to report. This assignment will also encourage research and investigation.

Assessment Task

The assignment consists of 3 questions subdivided into different tasks, for a total of 100 marks. Students are expected to research widely to answer all the required questions in a structured and organised manner with reference to published work.

Your word limit is 3,500 words in response to the questions posed, researching the topic from a varied number of sources including academic journals.

Where the submission exceeds the stipulated word limit by more than 10%, the submission will only be marked up to and including the additional 10%. Anything over this will not be included in the final grade for the assessment item. Abstracts, bibliographies, reference lists, appendices and footnotes are excluded from any word limit requirements.

This is an individual assignment, and it is worth 100% of the total module mark.

Academic Honesty

Plagiarism will not be tolerated and could lead to your failure, so please make sure you cite and reference correctly.

Additional Guidance

All calculations must be detailed and presented clearly.

Use of published work (citing references) within the text is expected.

A full list of references should be presented at the end of the case study.

Please avoid the use of ‘I, We, Us’ in your case study. You are expected to write in the third person.

Include the assignment front sheet, which is attached to the assignment brief.

Your answer should not repeat the question, as it will be included in your word count.

Formatting:

a) Font Type: Arial.
b) Font size 11/12.
c) Line spacing 1.5 to 2.
d) All pages must be numbered
e) All graphs, charts and tables should have a number and a title.
f) All text must be aligned to the left.

Guidance related to Harvard Referencing is available upon request.

Read this assignment brief and ask the module lecturer for clarification of anything that is not clear.

Assessment Learning Outcomes

Your assessment will be marked according to the extent to which you have met the learning outcomes described below. You should therefore endeavour in your assignment to meet these outcomes as fully as you can.

The learning outcomes that are being assessed in this assignment are:

On successful completion of the module with limited guidance, students will be able to:

Knowledge and Understanding

Subject – specific Skills

a) Analyse, interpret, and critically review more complex financial accounting information drawn from the current reporting environment.
b) Appraise critically various principles of long-term capital decisions, cost of capital, the time value of money, shareholder value and risk management.
c) Understand why organisations budget, the budgeting process of and appraising the various budgetary monitoring processes in organisations.
d) Analyse and criticise the role of budgeting in the current business environment using appropriate behaviourist theories and evaluating possible alternatives to budgeting.

Key Skills

e) Communicate and present effectively, in writing, using literacy and IT skills as appropriate.
f) Undertake effective research for additional information.

Question 1

Investment Appraisal   (20 Marks)

Your company is evaluating two investment opportunities, Project Imur and Project Unij. However, due to financial constraints, only one project can be undertaken.

Below is the projected data for each project:

Additional Information:

All cash flows occur at the end of the respective year, except for the initial investment, which is made at the beginning of the project.

Project Imur: The machinery will be disposed of at the end of Year 5, with an expected scrap value of $10 million.

Project Unij: The machinery will be disposed of at the end of Year 3 with no scrap value. Replacement machinery will be purchased at this point for $9 million.

• The cost of this replacement machinery has already been included in the Year 3 profit projection for Project Unij.
• The replacement machinery is expected to last for three years with no residual value.

The company depreciates all assets on a straight-line basis.

The company applies a discount rate of 15% for investment appraisals.

Required:

a) Calculate the annual cash flows for each of the projects. (5 Marks)

b) Use the investment appraisal methods to calculate the NPV and IRR for both projects.  (10 Marks)

c) Based on your calculations, advise the company on which project should be accepted or rejected. Provide a clear explanation of the financial and strategic implications of your recommendation.  (5 Marks)

Question 2

Beyond budgeting – Reform or abandon budgeting? (40 Marks)

Budgeting has faced significant criticism over the years. Jan Wallander famously described it as “an unnecessary evil,” while Jack Welch called it the “bane of corporate America.” Critics argue that traditional budgeting is increasingly ineffective in today’s dynamic business environment, where competition and the growing importance of intellectual capital challenge conventional financial planning methods. As a result, some advocate for abandoning budgets altogether, while others propose reforming them to better align with modern business realities.

Task:

Select one industry from the list below and critically evaluate one budgeting technique and one budgeting process commonly used within that industry. Discuss the validity of the criticisms against budgeting in the context of current global challenges, such as economic volatility, digital transformation, sustainability and changing market dynamics.

List of Industries:

• Manufacturing
• Banking
• Shipbuilding
• Retail
• Oil & Gas
• Logistics & Supply Chain
• Pharmaceutical & Biotechnology

Your critique should address the following:

Should traditional budgeting be abandoned? If so, what viable alternatives exist?

If budgeting should be reformed, what improvements or new approaches would be most effective?

Support your discussion with insights from major behavioural (motivation) theorists, as well as practical industry examples to strengthen your argument. 

Question 3 

Ratio Analysis  (40 Marks)

You are required to analyse the financial performance of a listed company over a period of three (3) financial years. The company must have a listing on the Singapore Exchange (SGX) mainboard. You are required to undertake independent research to review current annual company reports, market reports and academic literature to support your findings in your report.

(a) Financial Ratio Analysis  (30 Marks)

• Select and calculate at least 10 financial ratios to assess the company’s profitability, liquidity and solvency over the three years.
• Use charts and tables to illustrate trends and comparisons.
• Analyse the audited financial statements and conduct further research to provide clear explanations for each ratio, linking them to the company’s overall performance.

(b) Limitations of Ratio Analysis (10 Marks)

• Discuss the limitations of only using ratio analysis as a tool to interpret company performance.
• You are expected to research more information on the company and cite the material correctly.