Unit Details | Name | Finance for Managers |
| Code | HM5002 (MT) | |
| Year, Trimester | Trimester 2, 2024 |
Assessment Details | Name | Final Individual Assessment |
| Due Date & Time | 17 October, 2024 10.59 pm – Brisbane & Gold Coast students 11.59 pm – Melbourne & Sydney students |
Student Details | Student Number | |
| First Name | ||
| Family Name |
Submission Declaration | Integrity Declaration | I have read and understand academic integrity policies and practices and my assessment does not violate these. |
Full Name | ||
| Submission Date |
ALL SUBMISSIONS MUST INCLUDE YOUR STUDENT DETAILS AND SUBMISSION DECLARATION.
IF THESE DETAILS ARE NOT COMPLETED YOU RISK BEING PENALISED
Instructions
Academic Integrity Information | Holmes Institute is committed to ensuring and upholding academic integrity. All assessment must comply with academic integrity guidelines. Important academic integrity breaches include plagiarism, collusion, copying, impersonation, contract cheating, data fabrication and falsification. Please learn about academic integrity and consult your teachers with any questions. Violating academic integrity is serious and punishable by penalties that range from deduction of marks, failure of the assessment task or unit involved, suspension of course enrolment, or cancellation of course enrolment.
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Format & submission instructions |
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| Penalties |
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All responses must be entered in the answer boxes at the end of each question
Question 1 (10 marks)
ANSWER (box will enlarge as you enter your response)
ANSWER
Question 2 (10 marks)
Required:
Calculate the effective annual interest rate (%) for each of the offers. Round your final answer to four decimal places. (4 marks)
ANSWER
ANSWER
ANSWER
Question 3 (10 marks)
Mason is an investor looking to build a balanced investment portfolio with a mix of renewable energy stocks and tech company shares. He aims to achieve a high return while managing the risk associated with market fluctuations. The following information summarises the key details of his investment choices:
Mason's investment portfolio consists of $450,000 in renewable energy stocks and $300,000 in tech company shares. The following details are associated with these stocks:
| Renewable Energy | Tech Company | |
| Expected Return | 12% | 18% |
| Standard Deviation of Return | 8% | 15% |
| Correlation Coefficient | 0.65 | |
Required:
ANSWER
ANSWER
Question 4 (10 marks)
This question assesses your understanding of financial valuation methods related to a firm's capital structure, specifically focusing on calculating the current value of different financial instruments, such as bonds, ordinary shares, and preference shares. Cresta Inc.’s capital structure provides a real-world example to apply these valuation techniques, taking into account market returns and financial data provided for each element of the firm's capital.
The capital structure of Cresta Inc. is composed of the following elements:
Required:
ANSWER
ANSWER
ANSWER
Question 5 (10 marks)
Mystic Creations Inc., an expanding company, is exploring opportunities for growth. The company is currently assessing the feasibility of Project X and Project Y, both of which are independent (standalone) projects, each spanning a duration of 5 years with no salvage value. Mystic Creations Inc. has set a required rate of return of 12% for all investment projects and a maximum payback period of 2.5 years. The following details provide further information about Project X and Project Y.
| Project X | Project Y | |
| Initial Cost | -180,000 | -280,000 |
| Future Cash flow | ||
| Year 1 | 95,000 | 65,000 |
| Year 2 | 65,000 | 87,000 |
| Year 3 | 81,000 | 124,000 |
| Year 4 | 72,000 | 122,000 |
| Year 5 | 65,000 | 120,000 |
Required:
ANSWER
ANSWER
ANSWER
END OF FINAL INDIVIDUAL ASSESSMENT
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