MBB7008M Accounting and Finance for Decision Making Assignment 2 Brief | YSJU

Programme Learning Outcomes (PLO)

Upon successful completion of the module students will be able to: LO.1 Master the various aspects of financial analysis;
LO.2 Be able to determine the value, value creation and investment decisions of a firm; 
LO.3 Apply risk management techniques in a business to hedge risky projects;
LO.4 Have an overall appreciation of the application of financial management theories to practice.

This assessment covers the following LO’s:

LO.2 Be able to determine the value, value creation and investment decisions of a firm; LO.3 Apply risk management techniques in a business to hedge risky projects;
LO.4 Have an overall appreciation of the application of financial management theories to practice.

Assignment Description

Individual Case Study (1750 words, 50% of assessment weighting)

For this individual case study, you are required to analyse the company that you have been allocated for Assessment 1.

The COVID-19 pandemic has affected the businesses and economy dramatically. The Board of Directors is currently considering diversifying its business risk and plans to make some investments that would help the business sustain and grow in the long term. Assuming you were the Chief Financial Officer of the company/organisation, you were tasked to produce a report to the Board of Directors that identifies a potential investment project to help the business grow in the post COVID-19 environment.

Write a business report to the Board of Directors of your allocated company. In your report, you shall propose an investment project, and the cashflows for the proposed investment project is provided to you in the Moodle page. For the proposed project you need to consider the risk and return, evaluating the investment opportunity and analysing its potential impact on the company/organisation with consideration of its financial performance before you make recommendation, including the following discussions:

1.Executive Summary (250 words)

• Introduction of the company
• Purpose of the report
• Conclusion from your analysis and discussion
• Recommendations on how the company should proceed with the investment

2.Motivation of the proposed investment (200-300 words)

• Propose an investment that will help the company to sustain and grow in the long- term. Make sure the investment is relatable to the company. Incorporate the Why, How and Whatmodel:
  oWhy? Purpose:
• What is the real problem?
• Why is it important to resolve the problem?
  oHow? Process:
• How is the problem being caused?
• How must causal drivers of the problem change?
  oWhat? Proposition:
• What capabilities enable necessary changes in drivers?

3.Conduct investment appraisal using both quantitative and qualitative information (700-800 words)

• Using the relevant cashflows, calculate the Payback Period for the proposed investment
• Using the relevant cashflows, calculate the Accounting Rate of Return (ARR) for
  the proposed investment.
• Using the relevant cashflows, calculate the Net Present Value (NPV) for the investment, applying the discounted cash flow method at the company’s required rate of return.
• Comment on whether the company should proceed with the proposed investment according to the Payback Period, ARR and NPV calculations
• Identify and explain any 8 other factors which the company should consider in relation to the potential investment in this new machinery. These could be additional positive or negative factors. Ensure you include points which are specific to the nature of the investment, company, and current economic conditions (use PESTLE or SWOT analysis)

4.Critically discuss the risk and return and its potential impact on its financial performance (300-400 words)

• Conduct a Sensitivity analysis for the risk (Cost of Capital, Initial Investment, Scrap Value, and Cashflows) and return (NPV)
• Discuss the risk and return and potential impacts on the company’s financial
  performance and position.
• Discuss any Foreign Exchange Risk and Dividend Policy

Additional Information

Relevant

Data can be assessed via FAME for publicly traded UK company, stock exchange, Yahoo Finance, as well as the annual report and official website.

Analysis, links, examples and applications of the concepts and discussion should be made to current businesses and situations to show understanding of this module and its contents.

Reference should follow Harvard Referencing Guide. Please do not copy and paste other resources in your report. The appendices of the report shall include relevant supporting

Assessment Regulations

• Your attention is drawn to the University policy on cheating and plagiarism (or collusion).Penalties will be applied where a student is found guilty of academic misconduct, including termination of programme Policy Link
• You are required to keep to the word limit set for an assessment and to note that you maybe subject to penalty if you exceed that limit. (Policy Link) You are required to provide an accurate word count on the cover sheet for each piece of work you submit.
• For late or non-submission of work by the published deadline or an approved extended deadline, a mark of 0NS will be recorded. Where a re-assessment opportunity exists, a student will normally be permitted only one attempt to be re- assessed for a capped mark.(Policy Link).
• An extension to the published deadline may be granted to an individual student if they meet the eligibility criteria of the Exceptional Circumstances Policy.

Please see the assessment criteria below.

MBB7008M York St John University Level 7 Assessment Descriptor