Professional Documents
Culture Documents
A.Y.201516
COURSEWORK1(30%ofmodulemark)
InvestmentAppraisal:TheSigmaplccase
Sigmaplcisconsideringbuyinganewmachinetoexpandtheirproductionofofficefurniture.The
machinecosts1.3millionandwilllastfor5years.Thescrapvalueofthesemachinesis150,000.It
isexpectedthattheassetwillbesoldforthisvalueonthelastdayofthefifthyearandthata
replacementmachinewillthenbepurchased.Aninvestmentof120,000inworkingcapitalwillbe
neededinitially.Theprojectedfinancialdataarereportedbelow.
Projectedfinancialdata()
Sales
Year1
Year2
Year3
Year4
Year5
Materialsandcomponents (280,000)
(300,000)
(380,000)
(380,000) (300,000)
Labour
(470,000)
(490,000)
(550,000)
(550,000) (490,000)
(50,000)
(50,000)
(50,000)
Depreciation
(170,000)
(170,000)
(170,000)
(170,000) (170,000)
Allocatedoverheads
(230,000)
(230,000)
(230,000)
(230,000) (230,000)
Annualprofit
(100,000)
140,000
70,000
Advertising
(50,000)
70,000
(50,000)
110,000
Thefollowinginformationisalsoavailable:
1. Themachinewouldbefinancedwitha4yearbankloanataninterestrateof11.5%andwould
beboughtonthelastdayofthecompanyspreviousfinancialyear.
2. Theexpenditureonmaterialsandcomponents,andlabourisdirectlyrelatedtotheprojectand
wouldbeavoidedshouldthisnotbeundertaken.
3. Advertisingcostsarepaidyearly.
4. Theoverheadsareafairallocationoftheproductioncoststhatwillbeincurredifthenew
machineispurchased.
5. Thecostofcapitalforthistypeofinvestmentis10percent.Thedirectorssetatargetaccounting
rateofreturnoninvestmentof12percentandapaybackperiodoffiveyearsforallprojects.
Ignoretaxationandinflation.
DrFrancescaGagliardi(f.gagliardi@herts.ac.uk)
5BUS10460206FinancialManagement
A.Y.201516
Required
AssumethatyouareanexternalconsultanttoSigmaplc.Youarerequiredtoapplyarangeof
methodstocarryoutaninvestmentappraisaloftheprojectand,basedonyourresults,preparea
writtenreportinwhichyouprovideafirmrecommendationastowhetherthecompanyshould
investinthisproject.Youarealsorequiredto:1)evaluatetherobustnessofyourfindings,making
referencetoappropriatetheoryininvestmentappraisal,costofcapitalandrisk;2)discusswhat
othersourcesoffinancecouldbeusedasanalternativetotheproposedbankloan.
Instructions
Makesurethatyoustateanyassumptionsyouhavemadeandthatyoujustifytheinvestment
appraisalmethodsadopted.Youshouldminimisetextbookdescriptionsofthemethodsyouchoose
touse.
Includeallworkingsrelatedtotheapplicationofinvestmentappraisalmethodsinanappendix.The
reportbodyshouldincludeonlythefinalresultsofthesecalculations.
AllinformationmustbeappropriatelysourcedandreferencedusingtheHarvardreferencingsystem,
bothintextandinthereferenceslist.Pleaseensurethatallinformationusedisfromanappropriate
source.Inappropriatesourcesofinformation,suchasWikipedia,tutor2you,Investopedia,
descriptivewebsitesetc.,willresultinalossofmarks.
Thewordprocessedreportshouldbenolongerthan1,500words(excludingreferences,appendices
andtables)plusorminus10percent.Reportsoutsidethislengthwillbepenalised10percentfor
everyfurther10percentdeviationinlength.
Pleaseuse1.5linespacingandfontsizenolessthan11inyourreport.Includethestudentnumber
ofeachgroupmember,aswellasthewordcount,onthefrontpageofyourreport.Failuretofollow
anyoftheseformattinginstructionswillincurapenaltyofupto5%ofthecourseworkmark.
TheassignmentmustbesubmittedviaStudyNetby17:00hoursonWednesday9March2016
(earliersubmissionsareallowed).Foreachpair,bothstudentsmustsubmit:
a) Anidenticalcopyofthereportsothatonlinefeedbackcanbegiventobothmembers;
b) Anidenticalcopyofthegroupworklogprovidingdetailsoftasksassignedtoeachstudent,
andcertifyingthecontributionthateachstudentmadetotheassignment.Thetemplatethat
shouldbeusedforthegroupworklogisavailableinAppendix1ofthisbriefaswellasinthe
AssignmentsectionoftheStudyNetmodulewebsite.
LatesubmissionstoStudyNetwithin24hoursoftheabovedeadlinewillincura5%penalty(subject
toaminimummarkof40%).Submissionsafter24hours,butwithinoneweekofthedeadlinedate,
willbecappedatamaximummarkof40%.Submissionsafterthistimewillbeawardedamarkof
0%.
Pleasenotethatanysuspectedinstancesofplagiarismand/orcollusionwillbereportedfor
investigationandactionthroughtheUniversitysacademicconductprocess.
DrFrancescaGagliardi(f.gagliardi@herts.ac.uk)
5BUS10460206FinancialManagement
A.Y.201516
AssessmentCriteria(pleaseseeAppendix2forfulldetails)
Thispieceofworkisworth30%ofthefinalmodulemark.Youwillbeassessedon:
Content:
Structureandcontentofcashflowmodel
Accuracyofapplicationofinvestmentappraisaltechniques
Businessapplicationandintegrationofdataandliterature
Coverageandcriticalevaluationofrelevanttheory
Evidenceofreadingandresearchusingappropriatesources
Discussion/Analysis/Evaluation
Discussionandanalysisofresults
Justificationofrecommendations
Structureandpresentation
UseofHarvardreferencing
DrFrancescaGagliardi(f.gagliardi@herts.ac.uk)
5BUS10460206FinancialManagement
A.Y.201516
Appendix1
GroupWorkLog5BUS10460206FinancialManagement
Thepairshouldagreerolesforeachofthemembersatthebeginningofthetask.Thisgrouplog
shouldbecompletedbytheendofthetaskandshouldbesubmittedasanappendixtothereport.
MembersName
SRN
AssignedTasks
Individualcomments
Pleaseselecttheappropriateoption:
a)Icertifythatbothmembershavecontributedequallytothisassessment.
b)Icertifythat__________________contributed_____(outof100%)tothisassessmentand
__________________contributed_____(outof100%).
Pleaseinsertyoursignaturesbelow:
DrFrancescaGagliardi(f.gagliardi@herts.ac.uk)
5BUS10460206FinancialManagement
A.Y.201516
Appendix 2
UG Assessment & Grading Criteria for UHBS Coursework (Report)
REPORT
Task details
/100 marks
80-100
Outstanding
70-79
Excellent
60-69
Very Good
50-59
Good
40-49
Satisfactory
10 Marks
Outstanding... Presentation &
report structure, with numbered
paragraphs, list of contents/figures
&appendices.
Articulate & fluent academic writing
style with ideas cross referenced. No
grammatical / spelling errors.
Excellent ... Presentation & report
structure, with numbered
paragraphs, list of contents/figures,
appendices & cross referencing.
Articulate & fluent academic writing
style. Only a minor error.
Very good... Presentation & report
structure, paragraphing, use of
numbering, list of contents/figures,
appendices & cross referencing.
Fluent academic writing style.
Very few grammatical errors &
spelling mistakes.
Good... Clear presentation & report
structure, use of numbering &
appendices.
Writing is mainly clear but some
spelling &/ or grammatical errors.
10 Marks
Outstanding... Standard of
referencing within text & consistent
use of Harvard referencing system.
Accuracy of in-text references & full
details shown in Reference list.
30 Marks
Outstanding... Exploration of topic
showing excellent knowledge &
understanding through thorough &
appropriate research.
Impressive choice and range of
appropriate content.
15 Marks
Outstanding... Business insight
& application.
Breadth, depth & integration of
literature/data into work.
35 Marks
Outstanding... Level of
discussion/analysis/ critical
evaluation &/or reflection.
Highly developed/ focused work.
Excellent... Level of
discussion/analysis/ critical
evaluation &/or reflection clearly
developing points in the
appropriate way with thorough
consideration of all possibilities.
Very good... Level of
discussion/analysis/ critical
evaluation &/or reflection & a few
ideas/points could benefit from
further development &/or
evaluation/comparison.
Good... Level of
discussion/analysis/ critical
evaluation &/or reflection but
more ideas/points could be
addressed /developed further.
DrFrancescaGagliardi(f.gagliardi@herts.ac.uk)
5BUS10460206FinancialManagement
REPORT
Task details
/100 marks
30-39
Marginal Fail
20 29
Clear Fail
1 19
Little or
Nothing of
merit
10 Marks
Weak... Report format, limited or
poor structure.
Muddled work with many spelling & /
or grammatical errors.
10 Marks
Weak...Use of Harvard referencing
system with errors & inconsistently
applied. Limited referencing within
the text. Limited accuracy of in-text
references compared to those in the
final Reference list.
Inadequate... Use of Harvard
referencing with many errors &/or
inconsistencies.
Must see ASU
Nothing of merit... No or little
attempt to use the recommended
Harvard referencing system.
Must see ASU
A.Y.201516
30 Marks
Weak... Limited content / knowledge/
calculations. Limited or muddled
understanding of the topic/question.
Does not meet all the learning
outcomes.
15 Marks
Weak... Unsatisfactory evidence
of business application & insight
Work needs to show better links
between practical application
and theory.
Nothing of merit... No
evidence of appropriate
business application & insight.
35 Marks
Weak... Limited evidence of
discussion/analysis/ critical
evaluation &/or reflection.
More development & comment
needed. May need to do more
than describe.
Inadequate... Lacking /
inadequate level of discussion/
analysis/critical evaluation & /or
reflection. Descriptive.
Must see ASU
Nothing of merit...
Unsatisfactory level of
discussion/analysis/critical
evaluation &/or reflection
Must see ASU
DrFrancescaGagliardi(f.gagliardi@herts.ac.uk)