I just copy and paste the instructions, Assessment 1 has been done, so this is assessment 2.
There are no font restrictions and references requirement. So this could be easy to complete~
The file that I upload is the same instructions right here, hope that could help u to check out more conveniently than here.
Assessment 2: Individual coursework assignment (70%)
Part (a) case-study (60 marks).
The second component is an individually written report that is designed to test student’s knowledge and understanding of primary theories, concepts and their application. The second assessment will include a short reflective statement personal learning and the contribution made by the module to the student’s professional development. The second individual coursework assignment constitutes 70% of the assessment for this module. Student are required to write an essay or report by completing the questions. (Maximum 3000 words)
Assignment 2
Charm Inc., a software company, has developed a new game, ‘Fingo’, which it plans to launch in the near future. Sales of the new game are expected to be very strong, following a favorable review by a popular PC magazine. Charm Inc. has been informed that the review will give the game a ‘Best Buy’ recommendation. Sales volumes, production volumes and selling prices for ‘Fingo’ over its four-year life are expected to be as follows:
Year 1 2 3 4
Sales and production (units) 150,000 70,000 60,000 60,000
Selling price ($ per game) $25 $24 $23 $22
Financial information on “Fingo” for the first year of production is as follows:
Direct material cost $5.40 per game
Other variable production cost $6.00 per game
Fixed costs $4.00 per game
Advertising costs to stimulate demand are expected to be $ 650,000 in the first year of production and $100,000 in the second year of production. No advertising costs are expected in the third and fourth years of production. Fixed costs represent incremental cash fixed production overheads. ‘Fingo’ will be produced on a new production machine costing $800,000. Tax allowable depreciation will be claimed on a reducing balance basis at a rate of 25%. The machine will have a useful life of four years at the end of which no scrap
value is expected.
Charm Inc. pays tax on profit at a rate of 30% per year and tax liabilities are settled in the year in which they arise. Charm Inc. uses an after-tax discount rate of 10% when appraising new capital investments. Ignore inflation.
a) Net cash flows from year 1 to year 4 (20 Marks)
b) Payback period of the proposed investment (5 Marks)
c) The accounting rate of return of the proposed investment (5 Marks)
d) The net present value of the proposed investment (5 Marks)
e) Discuss the reason why the net present value investment appraisal method is preferred to other investment appraisal methods such as payback, accounting rate of return and internal rate of return (25 Marks)
Part (b) Reflection (40 marks)
Accounting information for management planning, control and decision making through the understanding of costing and budgeting concepts. Students are required to reflect on topics learned and how these provided you with useful skills that you weren’t aware of previously or offered you a different conceptual way to think about accounting and finance matters in business phenomena. Student may use the following learning outcomes to prepare reflective report.
LO1: Demonstrate a critical awareness of how management provides the basic for determining appropriate financial strategies and policies for a company
LO2: Use quantitative models and their independent judgement to analyse financial decisions and recommend feasible options that managers can implement
LO3: Carry out a systematic and detailed analysis of a company’s performance using information from annual reports and accounts, databases and the internet.
LO4: Demonstrate an understanding and use the appropriate analytical techniques to be applied to decisions involving the raising of finance, the use of funds or investment projects and the distribution of funds to investors.