Accounting and Finance for Decision Making

Module Title :: Accounting and Finance for Decision Making

Assessment Task :: Business Report based on Case Study

Word Count :: 1,750 words (‡10%)

Type of Submission :: Written Report

Method of Submission :: Turnitin via Moodle

Typed feedback within Turnitin in Moodle. Once the assignment is marked,

Feedback the comments will follow from Turnitin.

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.


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:

◦            Why? Purpose:

◦            What is the real problem?

◦            Why is it important to resolve the problem?

◦            How? Process:
How is the problem being caused?
”How must causal drivers of the problem change?

◦            What? 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