ACCO1142 Accounting for Performance and Control Coursework Brief 2026/27 | University of Greenwich

Case study

UBS Co is considering a new investment which would start immediately and last four years. The investment proposal is based on the following assumptions:

Asset cost – £160,000 – paid now.

Residual value (RV) - £40,000 – collected in Year 4.

25% reducing balance writing-down tax allowances are available on the asset cost.
Annual sales - 30,000 units in Years 1 and 2 and will then fall by 5,000 units per year in both Years 3 and 4.
Selling price - £4.40 per unit in Year 1
Selling price inflation - 3% per annum from Year 2 onwards.
Variable costs - £0.70 per unit in current term. Annual fixed costs - £9,000 in current term.
Cost price inflation - 5% per annum from Year 1 onwards and applies to variable and incremental fixed costs.
The project will require working capital investment equal to 10% of the expected sales revenue. The company only needs to invest more if required and can withdraw the investment if the current investment exceeds the required amount or no working capital is required. This investment must be in place at the start of each year.
Corporation tax - 30% per annum paid one year in arrears. The cost of capital is 12%.
£12,000 has already been spent on initial research.

Required

The senior managers require the management accountant to build a financial model for this investment. Senior managers will use the model for discussing the suitability of the investment; and in particular, how viable the investment would be if all the inflation rates increased.

The senior managers also require a report analysing the investment decision and a clear recommendation based on the calculation of NPV.

You are only required to base a decision on the NPV rule.

An Excel template is uploaded on Moodle. Please use this template for your coursework. When submitting, please change the file name to [Your full name – ID].

ACCO1142 Assessment criteria

Feedback

• Feedback to your model will be added to the model and returned to you. Comments will be in red.
• Feedback for your report will be given in Moodle.
• Template for written feedback. Feedback will be provided to students within 15 working days of the assignment deadline.