Finance and Management

Appraising the Financial Viability of a New Project

16 May 2023 12:18 PM | UPDATED 11 months ago

Appraising the Financial Viability of a New Project :

Appraising the Financial Viability of a New Project
Appraising the Financial Viability of a New Project

2022/23 ASSIGNMENT DOCUMENT UPLOAD  

Programme TitleBA/FdA Business Management/Business Enterprise/Marketing Management
Module TitleFinance for Managers
Module Code2094
Assignment TitleAppraising the Financial Viability of a New Project
Level4
Weighting60%
LecturersSangeeta Ram and Annamarie Dufficy
W/C Hand Out Date24/04/2023
Due DateBy 17:00 on18/05/2023
Feedback Post Date19/06/2023
ASSIGNMENT FORMATFILE UPLOAD (DOCUMENT)
Essay/Report FormatShort Report
Assignment Word Count 1500
Module Learning Outcomes covered in this assignmentAnalysis financial data in order to assess the financial performance of a business and/or department.Appraise the financial viability of a new project proposed by a business.
Submission Formate-SubmissionIndividual
Appraise the Financial Viability of a New Project

ASSIGNMENT TASK:

Media Marketing is a Birmingham based marketing agency that provides marketing services and shared workspaces for small enterprise start-ups. The design of the office space allows for: individual and shared offices; hot-desking; meeting rooms and event functions. Media Marketing is also fully equipped with the latest technological equipment.

Throughout the building there are a selection of coffee lounges and casual diners where customers can network with other like-minded entrepreneurs.

However, despite the promising interest and demand from the local entrepreneurial community, Media Marketing are reporting comparatively disappointing figures. For example: Media Marketing have stated that their attendance for the last financial year was 40,000 customers – a reduction of over 20% from previous years.

The owners of Media Marketing attribute this decline to the Corona Virus and the lockdown/restrictions imposed in Birmingham. The owners are, therefore, apprehensive about the future – particularly if further restrictions are imposed.

That said, due to the ‘lockdown’ and the impact this had on traditional working environments, the owners of Media Marketing are equally encouraged by the change in working culture. In particular,they are aware of a significant shift towards a demand for more flexible work environments.

For example: https://www.bbc.com/worklife/article/20210915-how-companies-around-the-world-are-shifting-the-way-they-work

Research undertaken by UCB Business Students, on behalf of Media Marketing, identified a number of issues that would influence potential customers in their decision to utilise a shared workspace environment. The research highlighted that:

  1. ‘Hygiene’ was a significant factor: this specifically related to the precautions the business had taken to reduce transmission of the virus.
  2. ‘Location’ was a significant factor: this specifically related to avoiding traffic and ease of parking.

Media Marketing are keen to explore these opportunities further. They are considering the financial viability of investing in either:

  1. An air filtering system in their main commercial estate which is located in the city centre.
  2. Converting an empty retail outlet, on the outskirts of Birmingham, into a new shared workspace.

Media Marketing anticipate the cost of capital will be 8% and have projected the cash-flow and profits below:

 Project A – Air Filtering System   Investment: £360 000  Project B – Converting Retail Outlet   Investment: £150 000
YearCash flowProfitCash flowProfit
168000650002800025000
288000680003000028000
387000700004500043000
466000800005200048000
595000750006400054000
Appraise the Financial Viability of a New Project

TASK GUIDANCE:

Media Marketing have requested that you complete the following:

  1. Calculate the Payback Period for each project and provide a summary of your key findings (approx.100 words)
  • Calculate the Accounting Rate of Return for each project and provide a summary of your key findings (approx. 100 words)
  • Calculate the Net Present Value for each project and provide a summary of your key findings (approx. 100 words)
  • Evaluate your results from the three methods and appraise the viability of each project. Provide commentary on which project you would recommend to Media Marketing and give clear justifications to support this decision (approx. 600 words).
  • Media Marketing are open to exploring other potential capital investment projects. Using reliable sources to support your arguments, provide two alternative projects you would recommend Media Marketing could investigate (approx. 600 words).

MARKING CRITERIA:

  • Statements and calculations can be prepared in either Word or Excel.
  • The assignment must be submitted as one complete document.
  • You must demonstrate a concerted effort to attempt each task.
  • Work must be proof-read and presented in a professional manner
  • Allocation of Marks:
    • Task 1: 10 marks
    • Task 2: 10 marks
    • Task 3: 20 marks
    • Task 4: 30 marks
    • Task 5: 30 marks

E-SUBMISSION GUIDANCE FOR DOCUMENT UPLOAD SUBMISSION:

GENERAL ASSIGNMENT GUIDANCE:

Teamwork and Its AssessmentShould this assignment require you to work as part of a team, you will receive an individual grade based upon your performance as well as personalised feedback. The module leader will explain how your individual grade and feedback will be determined.
Importance of Word Count and Presentation TimingsAssignment word counts and presentation timings should always be observed. Ignoring a word count increases significantly the risk of your work losing marks because it lacked structure, flow, focus and clarity. Timings must be observed for assessed presentations for the same reasons. 
E-submissionhttps://www.ucb.ac.uk/higher-education-student-handbook/assessment-issues/
Cut-off date for late workhttps://www.ucb.ac.uk/higher-education-student-handbook/assessment-issues/
Grading criteriahttps://www.ucb.ac.uk/higher-education-student-handbook/assessment-fairness-and-marking/
Plagiarismhttps://www.ucb.ac.uk/higher-education-student-handbook/essay-writing/plagiarism/
Extenuating Circumstanceshttps://www.ucb.ac.uk/higher-education-student-handbook/assessments-if-things-go-wrong/
UCB Referencing Guidehttps://portal.ucb.ac.uk/download/referencing/referencing-guide.pdf
General Academic Guidancehttps://ucbirmingham.instructure.com/courses/26756
Appraise the Financial Viability of a New Project

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