Financial Management Assignment

Course Details

Course Name: Financial Management

Course: FNN7102

Semester: Spring 2024

Course instructor: Tahsin Ozalan

Assignment Details

Type: Group Assignment (4 members per group)

Format: Report

Deadline: 21 April 2024, 23:59

Submission: Upload on Blackboard

Weighting: 50%

Learning Outcomes

Knowledge and Understanding

• Analyze the Corporation's financial statement and performance
• Understand financial decision-making.
• Understand key performers for a business and different scenarios of decision-making.

Skill and attribute

• Quantitative and numeric skills, which include modelling data, its interpretation, and presentation.
• Integration of empirical data within a textual-based report.
• Learn to apply financial management tools to different scenarios.

Marking Criteria

• Based on RBS’s GRADING Criteria and Mark Scheme
• Provide formative feedback for guidance.
• Late assignments and plagiarism offences will be treated as per policies.

Task 1

Fresh, a supermarket that is struggling to generate profit due to having no online business, wants to establish an online business using TOPDELIVERY LTD’s technology.

Some assumptions about it:

1. Sales revenue will increase per year.
2. Loss of existing in-store (physical) sales
3. Capital expenditures will increase, like on vehicles, delivery charges, and website manufacturing.
4. Other expenditures with retailers

• 270 million euros for the warehouse for 5 years, and after 5 years, 25 million euros per annum.
• 100 million euros to expand
• We will have to pay 1.85% of the total gross profit to TOPDELIVERY LTD.
• 20 million euros for a license

1. Taxation:

• Tax depreciation: 20% per annum of reducing balance with balancing adjustment
• Taxation rate: 25% of taxable profits. Half of the tax on that year and the rest will be paid by next year.
• Fresh has suffocated itself from other businesses to bear all expenditures and losses.
• A cost of capital of 12% per annum is used to evaluate profits (ignoring inflation).

We need to evaluate the idea of online services using Net Present Value (NPV), Internal Rate of Return (IRR), and Payback Period and to consider all risks with their methods to reduce risk. (10 marks)

Task 2

This task requires you to visit crowdfunding websites to select any new innovative business idea.

Your team will have to work as venture capital (VC) and help new businesses grow.

Two teams will work on it.

One team will evaluate the business strategy.

The other team will prepare a 12-month cash flow budget, considering strategies, and potential cash surpluses, and making recommendations to improve the business's cash position. (40 marks)

Task 3

Create a presentation recording to present their assessment results. All members should participate. (20 marks)

Marks Criteria