Assessment Details and Submission Guidelines
Trimester T1 2022
Unit Code HC2091
Unit Title Business Finance
Assessment Type Group Assignment
Assessment Title Capital Budgeting and Project Evaluation
Purpose of the assessment (with ULO
Mapping) Students are required to form a group of 4 members to study, undertake research, analyse and conduct academic work within the areas of business finance covered in learning materials Topics 1 to 10 inclusive. Penalty will be applied to solo groups.
The assignment examines the main issues, including: underlying theories, implement performance measures used and explain the firm’s financial performance. Your group is strongly advised to reference professional websites, journal articles and text books in this assignment (case study). All five Unit learning Outcomes (ULO 1, 2, 3, 4 and 5) are applicable.
Weight 25% of the total assessments
Total Marks 25 Marks
Word limit Maximum 2,500±200
Due Date: Registration of groups: 5 pm Friday, Week 5.
Final Submission of Group Assignment: Midnight (23:59 pm.) Sunday, Week 10
Late submission incurs penalties of 5 (five) % of the assessment value per calendar day unless an extension and/or special consideration has been granted by the lecturer prior to the assessment deadline.
• All work must be submitted on Blackboard by the due date along with a completed assignment cover page. Make sure that your group member’s name and surname, student ID, unit name, and code and lecture’s name are written on the cover sheet of the submitted assignment. A table of
HC2091 Group Assignment T1 2022
contribution by group members into group work is also to be provided in the cover page (please see the assignment cover page attached).
• The assignment must be in MS Word format, no spacing, 12-pt Arial font and 2 cm margins on all four sides of your page with appropriate section headings and page numbers.
• Reference sources must be cited in the text of the report, and listed appropriately at the end in a reference list using Adapted Harvard referencing style. Please see the guidelines at page 5. Penalty will be applied to incorrect referencing.
• Submitted work should be your original work showing your genuine studying. Evidence of your original work (allocation of tasks, discussion, file exchanges, drafts, etc.) need to be presented in the records of your group work in Discussion Board or Group Blogs, available in Group Tools in your Group for Group Assignment. Your assignment will not be marked without the evidence of your group work.
• Students need to read and understand the Holmes Academic Integrity Policy before they start any assessment to ensure that your assignment is misconduct free. (Please refer section 4.3 Guide to Academic Integrity p 27 of the Holmes Student Handbook and read Six Categories of Academic Integrity Breaches at the end of assignment carefully).
Three (3) attempts of submission are allowed for checking similarity and final submission. Only final submission is marked. As a guide similarity score of over 50% is considered as excessive plagiarism except in the cases where the similarity is caused by the use of template provided by the lecturers, specific types of assignment, references or sources of data. Please note that it takes 48 hours for the self-check report to be available for your viewing.
Please also note that working at same case study project evaluation assignment like this one may yield higher than 50% similarity. Therefore, do not panic and send emails to your lecturers and Unit Coordinator about high similarity after your submission if your work is genuine. Markers and Unit Coordinator will look at details of the similarity report and ensure a proper marking without any bias on that threshold 50%.
• When you submit your assignment electronically, please save the file as ‘Group Assignment- your group name.doc’. You are required to submit the assignment at Blackboard/Assessments/Group Assignment Information/Group Assignment and Submission Link. Always keep an electronic copy of your original file until you have received the final grade for the Unit. Please make sure that you submit the correct file in the correct format that is readable in Black Board. Any appeal relating to submitting wrong files and wrong format after the deadline will not be considered.
Group Selfenrolment • Please refer to the Group self-enrolment guidelines, as saved in the Assessments folder in order to enrol into a group.
• You should not enrol into any group without the consent of the other members. To avoid random students joining your group, you should first decide who the four (4) members are in your group and enrol at the same time.
• Any request for leaving a group or changing groups need to be emailed to BB Help Desk for processing.
ASSIGNMENT SPECIFICATIONS ASSIGNMENT TASK
This assignment task is a capital budgeting and project evaluation task with two parts:
Part 1: Capital Budgeting Decision Making
Part 2: Risk Analysis and Project Evaluation
Please use the provided template
Specific Information for HC2091 Group Assignment T1 2022 Marking:
(Please fill in this table and put it right before Introduction part in your assignment. It is important for marking, penalty is applied for missing information)
Student name and ID Campus and Interactive Tutorial Group Number Which section(s) did each person work on Contribution (%)
The introduction should briefly explain the purpose of the assignment (not more than 200 words)
PART 1. CAPITAL BUDGETING DECISION MAKING (10 marks)
Case Study 1: Your group is working as the Finance Team of New Age Toys Ltd. Your Team was required by the company’s management to prepare and evaluation on a new investment that aims to boost revenue by at least 15%. New Age Ltd.’s Management Board would like to convince the oncoming shareholders meeting on the outcome of this project. The board required your team to choose a method of capital budgeting that enables the board to tell shareholders about the potential share value increase generated by the new project. The table below shows the estimated data available of two alternative options for your company’s choice of capital budgeting.
Option 1 Option 2
Initial Investment $500,000 Initial Investment 655,000
Cash Flow in Cash flow in
Year 1 200,000 Year 1 250,000
Year 2 200,000 Year 2 250,000
Year 3 200,000 Year 3 250,000
Year 4 200,000 Year 4 250,000
Your team is required to write a short report to the company’s Management:
1) To select a relevant method of project evaluation among five investment criteria of Net Present Value (NPV), Average Accounting Return (AAR), profitability Index (PI), Internal Rate of Return (IRR), Simple Payback Period, and Discounted Payback Period for each alternative option, given the market required rate of return for all projects of this type is xxx% and the company’s benchmark of payback is maximum 3 years. Your recommendation must include your justification on why you choose the specific method based on its pros and cons compared to other methods and the financial condition of the company. (4 marks)
2) To perform the selected method and present the outcome of your project evaluation and recommend the option 1 or option 2 should the company choose for the project. Your justification must include calculation steps and numerical outcomes. (6 marks)
PART 2. RISK ANALYSIS AND PROJECT EVALUATION (13 marks)
Case Study 2: Your company has another project to launch a new toy product that is expected to sell for an average price of $50 per item. Launching this project will require the company to buy an equipment with the cost of $450,000 and residual value of $50,000 after five year. The company expects it can sell 200,000 unit per year at this price for a period of 5 years with this equipment. An additional working capital requirement for producing this product is $50,000, which is expected to be retrieved at the end of the project. Other information is available below:
Variable cost per unit of $20
Cash fixed costs per year is $30,000
Depreciation method: straight line
Discount rate: xxx%
Tax Rate: 30%
Your financial department conducted some economics forecast and estimated that in the coming time, there may not be any significant changes in variable cost per unit and total fixed costs per year in production. However, sales may be subject to an unexpected outcome due to the rivalry of your company’s competitor. This competitor is also developing their new toy with similar features. If the competitor successfully launches their new toy and occupies the best potential market before you, the worst-case scenario will occur to your company product, where both unit sales and price per unit decrease by 15%. If your company successfully launches your new product and occupy the best potential market before your competitor, then your company can enjoy a 15% increase in both unit sales and price per unit.
Perform a scenario analysis with cash flows of the project to determine the sensitivity of the project NPV with the following changes in the value drivers in the worst-case scenario and best- case scenario.
Worst case scenario:
Unit sales decrease by 15%
Price per unit decreases by 15%
Best case scenario:
Unit sales increase by 15%
Price per unit increases by 15%
Provide your results in (a) relevant tables. A conclusion on the risks of the project cash flows need to be drawn out.
Based on the outcome of two parts, provide brief conclusion, summarizing what you have done in the assignment (not more than 200 words).
Assignment Preparation guideline/ Important Note: Students are required to attend Interactive Tutorial Sessions which covers Topics 4. NPV and Other Investment Criteria and Topic 5. Making Capital Investment Decisions (conducted in Week 5 and Week 6) for inputs and data to answer the questions in Part 1 and 2, and training on how to work with correct capital budgeting technique, proper format, structure, calculation tables and terminologies. Assignments with different templates, terminologies and calculations from the solution templates and guidance provided to you in the sessions will be investigated as potential contract cheater done assignments.
Different discount rates will be assigned to different groups of students for this Part 1 and Part 2 HC2091 Group Assignment. Students need to attend Tutorial Class in Week 9 to get the information and perform the tasks.
Guidelines – Adapted Harvard Referencing:
1. Reference sources in assignments are limited to sources which provide full text access to the source’s content for lecturers and markers.
2. The Reference list should be located on a separate page at the end of the assignment and titled: References.
3. It should include the details of all the in-text citations, arranged alphabetically A-Z by author surname. In addition, it MUST include a hyperlink to the full text of the cited reference source. For example; P Hawking, B McCarthy, A Stein (2004), Second Wave ERP Education, Journal of Information Systems Education, Fall, http://jise.org/Volume15/n3/JISEv15n3p327.pdf
4. All assignments will require additional in-text reference details which will consist of the surname of the author/authors or name of the authoring body, year of publication, page number of contents, paragraph where the content can be found. For example; “The company decided to implement an enterprise wide data warehouse business intelligence strategies (Hawking et al, 2004, p3(4)).”
Non-Adherence to Referencing Guidelines:
Where students do not follow the above guidelines:
1. Students who submit assignments which do not comply with the guidelines will be asked to resubmit their assignments.
2. Late penalties will apply, as per the Student Handbook each day, after the student/s have been notified of the resubmission requirements.
3. Students who comply with guidelines but the citations are “fake” will be reported for academic misconduct.
Holmes Institute is committed to ensuring and upholding Academic Integrity, as Academic Integrity is integral to maintaining academic quality and the reputation of Holmes’ graduates. Accordingly, all assessment tasks need to comply with academic integrity guidelines. Table 1 identifies the six categories of Academic Integrity breaches. If you have any questions about Academic Integrity issues related to your assessment tasks, please consult your lecturer or tutor for relevant referencing guidelines and support resources. Many of these resources can also be found through the Study Sills link on Blackboard.
Academic Integrity breaches are a serious offence punishable by penalties that may range from deduction of marks, failure of the assessment task or unit involved, suspension of course enrolment, or cancellation of course enrolment.
Table 1: Six categories of Academic Integrity breaches
Plagiarism Reproducing the work of someone else without attribution. When a student submits their own work on multiple occasions this is known as self-plagiarism.
Collusion Working with one or more other individuals to complete an assignment, in a way that is not authorised.
Copying Reproducing and submitting the work of another student, with or without their knowledge. If a student fails to take reasonable precautions to prevent their own original work from being copied, this may also be considered an offence.
Impersonation Falsely presenting oneself, or engaging someone else to present as oneself, in an in-person examination.
Contract cheating Contracting a third party to complete an assessment task, generally in exchange for money or other manner of payment.
Data fabrication and falsification Manipulating or inventing data with the intent of supporting false conclusions, including manipulating images.
• Source: INQAAHE, 2020
Marking criteria Weighting
Part 1. Capital budgeting Decision Making
1.1. Select a relevant capital budgeting method for project evaluation 4%
1.2. Perform the selected method and present the outcome of project evaluation and recommendation 6%
Part 2. Risk Analysis and Project Evaluation
NPV Scenario Analysis 13
Academic writing: Introduction, conclusion, presentation, structure and academic writing 2%
Total weight of written report 25%
Content Excellent Very Good Good Satisfactory Unsatisfactory
(80%-full marks given) (70-79% marks
given) (61-69% marks
given) (50-60% marks
given) (0-49% marks
select a relevant method among five investment criteria Correct selection of investment criterion with outstanding
justification based on pros and cons of each
financial condition of the company Correct selection of investment criterion with very good
justification based on pros and cons of each method and circumstance of the company Correct selection of investment criterion with good justification based on pros and cons of each method and circumstance of the company Selection of an investment criterion with some satisfactory
justification based on pros and cons of each method and circumstance of the company Incorrect selection of investment criterion with no or insufficient justification
1.2. To perform the selected method and present the outcome of your project evaluation
the option company choose for the project. Correct recommendation with outstanding justification, calculation and outcome of capital budgeting technique Correct recommendation with very good justification, calculation and outcome of capital budgeting technique Correct recommendation with good
justification, calculation and outcome of capital budgeting technique Correct recommendation
with sufficient calculation and outcome of capital budgeting technique Incorrect recommendation
with insufficient, incorrect calculation and outcome of capital budgeting technique
Analysis Presenting a correct and
well-presented NPV scenario analysis with proper analysis and
Analysis is taken with exceptional good
justification and presentation of data and calculation. Presenting a correct and wellpresented NPV scenario analysis with proper analysis and justification. Presenting a correct NPV scenario analysis with proper analysis and justification. Presenting a correct NPV scenario analysis with proper analysis and justification.
However, there may be some incorrect calculation, limited analysis and explanation. No or incorrect NPV scenario analysis.
Academic writing Demonstrated a high level of understanding and skills of academic writing by means of
criticism, logical argument, and interpretation of data and information. Demonstrated a good understanding and skills of academic writing by means of
criticism, logical argument, and interpretation of data and information. Followed given formatting guidelines. Demonstrated a reasonable understanding and skills of academic writing by means of
criticism, logical argument, and interpretation of data and information. Partially followed given formatting guidelines Demonstrated
limited skills of academic writing in terms of structure, presentation, wordings and referencing. No satisfactory attention on given formatting guidelines Failing to meet the requirements of academic writing in terms of structure, presentation, wordings and referencing. No attention on given formatting guidelines