Reference no: EM133074472 , Length: word count:2500

HI5002 Finance for Business

Assessment - Reflective Journal, Fact Finding of Financial Market and Capital Budgeting Analysis

Purpose: Undertake research, analyse and conduct academic work within the topics of financial management

Assignment Task:

Part 1: Reflective journal of one selected topic among 9 first topics of the course.
Part 2: Fact finding of securities investment practices in Australia.
Part 3: Capital Budgeting and Project Evaluation.

Introduction
A brief introduction of your group's work: the purpose of assignment, key findings and structure of
the assignment (not more than 150 words)

Part 1. Reflective journal of a selected topic among 9 first topics of the course

Your group is required to write a reflective journal about what you had learnt in an interactive tutorial session that covers one selected topic among 9 first topics of HI5002 course. Once your groups are formed on Black Board, you need to contact your lecturer to get the topic assigned to your groups. The following requirements must be met for this Reflective Journal to be marked:

1) Correct name of the topic as per syllabus, lectures and tutorials must be provided
2) Correct time, date and name of the lecturer who delivered the interactive tutorial session should be provided.
3) Evidence of your discussion with your lecturer about one question related to the chosen topic: screen shots of email exchanges submitted in an appendix to your assignment.

Reflective questions:

Question 1: What are the financial concepts you have learnt in the session? Briefly explain the concepts? (please note that only list the financial concepts discussed in the interactive tutorial session, not all the financial concepts discussed in the recorded lecture) (2 marks)

Question 2: What are the important issues your lecturer reminded you to note down and pay your special attention to regarding the financial concepts/formulas/calculations/skills/techniques you have learnt in that session?

Question 3: How many practice questions did you work on the class with your lecturer? Briefly summarize the content of that questions and what you have done with your lecturer in practicing with those questions. What are the problems did you encounter when you worked on that practice questions?

Question 4: How can you potentially apply what you have learnt in that class in your real life?

Question 5: What question did you ask your lecturer for the topic of that session, what is your lecturer's answer and your discussion aftermath?

Your group need to raise one (01) short question related to content of the selected topic (it should not be the one of the 4 reflective questions mentioned above), get the answer and discuss with your lecturer about any issue related to the content of the selected topic. Students are not allowed to ask the questions that are unrelated to the chosen topic, questions fall into the main content of other unit, and/or questions from other unit's tutorials or assessments. In-depth questions that show your brainstorm will give you good marks.

Emailing is the preferred method for asking the question and discuss it with your lecturer (only Holmes emails are accepted). For this question 5 only, you need to summarize your question, answer from your lecturer and any further discussion in a paragraph which is not longer than 300 words.

Part 2. Fact finding of securities investment and trading practice in Australia

You are required to go to Online Portals of ASX and ASIC, explore the data and information in the portals and perform the following tasks:

Task 1: Read and briefly summarize contents of three investment options offered by ASX to investors. Students are required to attend online interactive tutorial in week 9 to get the guidance from lecturers about which investment options they need to describe in this Part. This information will not be available in tutorial solutions (3 marks).

Task 2: Search for guidance of ASX on starting investment and answer two questions assigned to your group. Students are required to attend online interactive tutorial in week 9 to know what are the questions you need to answer in this Task. This information will not be available in tutorial solutions.

Task 3: Search for information in the ASIC Portal for Finance Professional and answer two questions assigned to your group. Students are required to attend online interactive tutorial in week 9 to get the guidance from lecturers about the questions your group will need to answer in this Task. This information will not be available in tutorial solutions.

Task 4: Search for information in the ASIC Portal for Consumers and answer two questions assigned to your group. Students are required to attend online interactive tutorial in week 9 to get the guidance from lecturers about the questions your group will need to answer in this Task. This information will not be available in tutorial solutions.

Note that these are fact finding questions and all the information need to be taken from the provided sources (ASX and ASIC websites). Students need to explore data and information in the websites to get necessary inputs and use your own wordings to rephrase it, then make a proper intext citation and references to the ASX and ASIC sources (See the guideline at the end of assignment instructions. Detailed guidance about how to make references will be provided by your lecturers in week 9 class). High similarity index showing the source of ASX with proper references

Part 3: Capital Budgeting and Project Evaluation

Capital Budgeting Decision Making

Case Study: Assume that your group is working in Finance Department of a food processing company. Your company is considering to buy a new assembly line to replace the old one.
Your company's suppliers offered two models of assembly line which perform the same function, having different initial investment and annual operating expenses. The table below shows the estimated cash flows available for each option:

You are required to write a short report to the company's Management:

1) To select a relevant method among five investment criteria of Net Present Value (NPV), Equivalent Annual Cost (EAC), profitability Index (PI), Internal Rate of Return (IRR), Simple Payback Period, and Discounted Payback Period for this project, given the discount rate applied for all project is xxx% (to be provided later) 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 circumstance of the company.

2) To perform the selected method and present the outcome of your project evaluation and recommend the option 1 or 2 should the company choose for this project. Your justification must include calculation steps and numerical outcomes.

Risk Analysis and Project Evaluation: NPV Scenario Analysis

Case Study: Your group is working in Finance Department of a production company. Your company is considering a new investment project. In the new project, the company will buy a new machinery that enable to launch a new product. It is expected an annual sale of 20,000 products for an average price of $450 per unit for 5 years. The new investment project has the initial cost of $1,850,000, a residual value of $350,000 at the end of the project. The company will need to add $400 000 in working capital which is expected to be fully retrieved at the end of the project. Other information is available below:

Depreciation method: straight line
Variable cost per unit: $270
Cash fixed costs per year: $350,000
Corporate marginal tax: 30%
Discount rate: xxx% (discount rate to be provided later)

Your Finance Department conducted some economics forecast and estimated that in the coming time, the enduring covid-19 pandemic may cause uncertainty in the economic recovery. You Finance Department decides to do a scenario analysis to determine the sensitivity of the project's NPV to different scenarios. Required:

Work on two scenarios corresponding to the worst- and best-case outcomes that are defined in terms of the estimated values for each value driver of the project. You need to provide your results in (a) relevant tables:

Worst case: The pandemic continues, causing: Unit sales decrease by 15%; price per unit decreases by 15%; variable cost per unit increases by 15 %; cash fixed cost per year increases by 15%

Best case: The pandemic is gone, economy is recovered well, enabling: Unit sales increase by 15%; price per unit increases by 15%; variable cost per unit decreases by 15%; cash fixed cost per year decreases by 15%.

Conclusion
Summarize / Reflection the outcomes of your group's works (not more than 150 words)

Assignment Preparation guideline/ Important Note: Students are required to attend Interactive Tutorial Sessions Week 8 (topic 6) and Week 9 (Topic 7) for inputs 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 in Part 3. 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.

Attachment:- Finance for Business.rar