Financial Analysis Management & Enterprise

ASSESSMENT TYPE: 3000 Words Assignment Report

Your Assignment consists of 2 tasks, both to be completed, as follows:
Task 1
A property company wishes to develop a site it owns. Three sizes of property are being
considered and the cots and revenues are as follows:
Year 0 Expenditure £m Year 1 to perpetuity Rentals
p.a. £m
Small development 2 0.6
Medium development 4 1
Large development 6 1.35
The projects are mutually exclusive because the building of one size of development excludes the
others. The following results were obtained for the payback, NPV and IRR calculations using a
cost of capital of 10%:
Year 0
Expenditure
£m
Year 1 to
perpetuity
P.V. of
rentals £m
Payback
(years)
NPV (£m) IRR (%)
Small 2 6 3.33 4 30
Medium 4 10 4 6 25
Large 6 13.5 4.44 7.5 22.5
You are asked to use the data presented above to critically evaluate the various advantages and
disadvantages and limitations (if any) of using the payback, NPV and IRR as alternative methods
of investment appraisal.
Task 2
A family owns a chain of supermarkets in the form of a private company. Its present annual
turnover is just over 200 million Euros and is currently entirely owned by the five family
members. The company wishes to finance the building of a new supermarket which will take two
years before it can start operating profitably. The company needs 30 million Euros to build the
supermarket. Critically evaluate the various methods which are available to the owners to finance
the project.
2. Presentation
 Your reports should be clearly and logically structured in whatever
format appears to be the most suitable for supporting the analysis,
arguments, conclusions and recommendations.
 Key points may be summarised as a bulleted list to optimise the use of
your words.
 Tables, graphs and charts are a convenient way of organising your
findings and presenting data. They also make it easier for the end user
of your report (and the marker) to understand your findings and so you
are recommended to use visual aids where appropriate.
3. Assessment Requirements:
 The submission of your work assessment should be organised and clearly
structured.
 Maximum word length allowed is 3000 words, excluding words in Charts
& Tables and in the Appendixes section of your report.
 Student is required to submit a type-written document in Microsoft Word
format with Times New Roman font type, size 12 and line spacing 1.5.
 This assignment is worth 100% of the final assessment of the module.
 Indicate any sources of information and literature review by including all
the necessary citations and references adopting the Harvard
Referencing System.
 Students who have been found to have committed acts of Plagiarism
are automatically considered to have failed the entire module. If
found to have breached the regulation for the second time, you will
be asked to leave the course.
 Plagiarism involves taking someone else’s words, thoughts, ideas or
essays from online essay banks and trying to pass them off as your own.
It is a form of cheating which is taken very seriously.
4. Marking Scheme:
Word
Limit
Marks
(%)
Task 1. 1500 45
Task 2. 1500 45
Presentation skills. 10
Total 3000 100%
5. Learning Outcomes tested in this assignment
Upon successful completion of this module the student will be able to:
1. Demonstrate a critical awareness, comprehension and synthesis of a
business and its future prospects.
2. Identify, organise, analyse and critically evaluate financial information,
articulate conclusions and form recommendations, based on a
disciplined, thoughtful and well-structured appraisal of the evidence and
founded on clear theoretical underpinnings.
3. Structure and communicate ideas based on an understanding and
appreciation of the practical application of key issues and theories in
corporate financial management.
4. Display an ability to evaluate complex business issues, synthesise
concepts and to formulate and propose advice based on informed
judgement.
5. Articulate conclusions and make recommendations, in an independent
manner, which are based on informed analysis and critical appraisal.
6. Notes on Plagiarism
Plagiarism is passing off the work of others as your own. This constitutes academic
theft and is a serious matter that is penalized in assignment marking.
Plagiarism is the submission of an item of assessment containing elements of work
produced by another person(s) in such a way that it could be assumed to be the
student’s own work. Examples of plagiarism are:
 The verbatim copying of another person’s work without
acknowledgement
 The close paraphrasing of another person’s work by simply
changing a few words or altering the order of presentation without
acknowledgement
 The unacknowledged quotation of phrases from another person’s
work and/or the presentation of another person’s idea(s) as one’s
own.
 It also includes self-plagiarism’ (which occurs where, for example,
you submit work that you have presented for assessment on a
previous occasion). And the submission of material from ‘essay
banks’ (even if the authors of such material appear to be giving you
permission to use it in this way)
Copying or close paraphrasing with occasional acknowledgement of the source may
also be deemed to be plagiarism is the absence of quotation marks implies that the
phraseology is the student’s own.
Plagiarised work may belong to another student or be from a published source such
as a book, report, journal or material available on the internet.
7. Harvard Referencing
The structure of a citation under the Harvard referencing system is the author’s
surname, year of publication, and page number or range, in parentheses, as follows:
 The page number or page range is omitted if the entire work is cited.
The author’s surname is omitted if it appears in the text. Thus we
may say: “Jones (2001) revolutionized the field of trauma surgery.”
 Two or three authors are cited using “and” or “&”: (Deane, Smith,
and Jones, 1991) or (Deane, Smith & Jones, 1991). More than three
authors are cited using et al. (Deane et al. 1992).

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 An unknown date is cited as no date (Deane n.d.). A reference to a
reprint is cited with the original publication date in square brackets
(Marx [1867] 1967, p. 90).
 If an author published two books in 2005, the year of the first (in the
alphabetic order of the references) is cited and referenced as 2005a,
the second as 2005b.
 A citation is placed wherever appropriate in or after the sentence. If it
is at the end of a sentence, it is placed before the period, but a
citation for an entire block quote immediately follows the period at the
end of the block since the citation is not an actual part of the quotation
itself.
 Complete citations are provided in alphabetical order in a section
following the text, usually designated as “Works cited” or
“References”. The difference between a “works cited” or “references”
list and a bibliography is that a bibliography may include works not
directly cited in the text.
 All citations are in the same font as the main text.
Examples of book references are:
 Smith, J. (2005a). Dutch Citing Practices. The Hague: Holland
Research Foundation.
 Smith, J. (2005b). Harvard Referencing. London: Jolly Good
Publishing.
In giving the city of publication, an internationally well-known city (such as London,
The Hague, or New York) is referenced as the city alone. If the city is not
internationally well known, the country (or state and country if in the U.S.) are given.
Examples of journal references are:
 Smith, John Maynard. “The origin of altruism,” Nature 393, 1998,
pp. 639-40.
 Bowcott, Owen. “Street Protest”, The Guardian, October 18, 2005,
accessed February 7, 2006.

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