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HI5002 T1 2020 Finance for Business

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HI5002 Finance for Business

Assessment Details and Submission Guidelines
Trimester T1 2020
Unit Code HI5002
Unit Title Finance for Business
Assessment Type Group Assignment
Assessment Title Research on Financial market and Capital Budgeting Analysis
Purpose of the assessment (with ULO Mapping) Students are required to form a group from 3 to 5 members to study, undertake research, analyse and conduct academic work within the topics of financial management from week 1 to week 9. (ULO 1, 2, 3 and 4)
Weight 40 % of the total assessments, including 30% for written report and 10% for presentation
Total Marks 40 (30 for written report and 10 for presentation)
Word limit Not more than 3,000 words
Due Date Registration of groups: 5:00 pm Friday, Week 7 Final Submission of Group Assignment and Presentation: 11:59 pm Sunday, Week 10
Submission Guidelines All work must be submitted on Blackboard by the due date along with a completed assignment cover page. Make sure that your group member’s name and surname, student ID, unit name, and code and lecture’s name are written on the cover sheet of the submitted assignment.The assignment must be in MS Word format, no spacing, 12-pt Arial font and 2 cm margins on all four sides of your page with appropriate section headings and page numbers.Reference sources must be cited in the text of the report, and listed appropriately at the end in a reference list using Harvard referencing style.Submitted work should be your original work showing your genuine studying. Evidence of your original work (allocation of tasks, discussion, file exchanges, drafts, etc.) need to be presented in the records of your group work in Discussion Board, available in Subject Tools, Black Board. Your assignment WILL NOT BE MARKED by your lecturers if the evidence of your group work does not shown in the Discussion Board. Three attempts of submission are allowed for checking similarity and final submission. Your lecturers only mark the final submission. As a guide, a similarity score of over 30% is considered as excessive except in the cases where the similarity is caused by the use of template provided by the lecturers, types of assignment, references or sources of data. Please note that it takes 48 hours for the self-check report to be available for your viewing. Please also note that fact findings and working at same case study project evaluation assignment like this one may yield higher than 30% similarity. Therefore, do not panic and shower your lecturers with emails about similarity after your submission if your work is genuine. Your lecturers will look at details of the similarity report and ensure a proper marking without any bias on that threshold 30%.When you submit your assignment electronically, please save the file as ‘Group Assignment- your group name.doc’. You are required to submit the assignment at
  Group Assignment Final Submission, which is under Assignment and Due Dates on Blackboard. Always keep an electronic copy until you have received the final grade for the Unit. Please make sure that you submit the correct file in the correct format that is readable in Black Board. ANY APPEAL RELATING TO SUBMITTING WRONG FILES AND WRONG FORMAT AFTER THE DEADLINE WILL NOT BE CONSIDERED.

ASSIGNMENT SPECIFICATIONS

Assignment Tasks

This assignment task is a written report that include 3 parts: Part 1 is a research and fact finding on Australian financial market. Part 2 is a fact finding of financial market regulation in Australia and Part 3 is a risk analysis and project evaluation. To complete the assignment, groups are recommended to obtain data and information from relevant web sites, especially websites of Australia Stock Exchange: www.asx.com.au; Australian Securities and Investment Commission: https://asic.gov.au/ and the Australian Prudential Regulation Authority (APRA) https://www.apra.gov.au for their research and fact finding. Using secondary data (researches done by others) for fact findings in Pat 1 and Part 2 is NOT RECOMMENDED and will be PENALIZED. Please also note: group assignment for HI5002 is DIFFERENT every trimester. Attempt to submit a PREVIOUS TRIMESTER ASSIGNMENT or A WRONG ASSIGNMENT will get a ZERO (0) mark without any consideration for resubmission.

Requirements HI5002

The assignment should cover the contents described bellows.

Assignment Structure and Details of Assignment Tasks
Introduction Briefly introduction of your group’s work: the purpose of assignment, key findings and structure of the assignment (not more than 300 words)
Part 1. Research and fact finding of Australian financial market
1.1 Comparison of four key financial institutions: commercial banks, insurance companies, investment banks and investment funds in Australia from the perspective of a potential investor who would like to invest into the institutions Criteria for comparison include: (1) classification (the group of financial institutions it belongs to); (2) market sector of operation; (3) key business activities; and (4) main source of income. Organize your group’s comparison in a relevant table. Your group’s research should be supported by a fact finding of real life examples of a commercial bank, insurance company, and investment bank and investment fund in Australia. Your group’s discussion on each example should reflect the above mentioned criteria and the following information: (i) what is the code of stock listed, (ii) when was the company’s stock was first listed, (iii) what is the current market capitalization of that stock, (iv) the current total share outstanding, (v) who is the chairman and who is the CEO of that company, (vi) a graph of five year dividend payment for each company and (vii) next dividend date. Using ASX and ASIC websites for the fact finding. Your group is not allowed to choose the cases I have used as examples in this assignment instruction.   Example: Commonwealth Bank is a commercial bank, which is categorized in the group of Authorized Deposit-taking Institutions (ADIs) in Australia. Commonwealth Bank operates in banking market sector. Its key business is taking deposit from individuals as well as businesses, and then lend those pooled savings to other individuals and businesses. Its
  main source of income is the difference between the interest rates it charges the borrowers and the interest rates it pays the depositors. The code of listed commonwealth bank stock on Australian Stock Exchange is CBA. The stock was first listed on 12/09/1991. The total outstanding share 1,770,239,507. As of 18 February 2020, CBA market cap is 158.37bn, Ms Catherine Livingstone is the CBA’s Chairman, Non Exec. Director and Mr Matthew Comyn is the Managing Director, CEO, Director. The next dividend payment date is 31 March 2020.  
1.2 Analysis of three financial management questions: (i) capital budgeting, (ii) capital structure and (ii) working capital management   Define the three financial management questions and justify your group’s analysis by illustrating examples: Choose one or more events described by media (CNN Business, Financial Times, Dow Jones financial news etc.) about a company who is doing one or more activities related to the three financial management questions. Analyse that event (s) applying the three financial management questions. Note: Each question is to be illustrated by at least one event.   Example of an event in media that reflect one of the three financial management questions:   Commonwealth Bank’s Project Bond-i: Bonds on block chain in collaboration with World Bank: “In August 2018 the World Bank and CommBank successfully launched Bond-i (‘blockchain operated new debt instrument’). It’s the world’s first bond to be created, allocated, transferred and managed through its life cycle using block chain technology”. Source: https://www.commbank.com.au/business/business-insights/project-bondi.html   Bond-I Project by Commonwealth Bank is an outstanding example of capital budgeting in financial management. This is an investment decision to generate future cash flows for the bank in providing the auxiliary financial service of issuing debt instruments. Using block-chain technology to create, locate, transfer and manage debt instruments undoubtedly enable huge saving of money and enhancing efficiency. However, the security risk may be a big potential problem for this project.
Part 2. Fact Finding of Australian financial market regulation
2.1 Fact finding of the listing on ASX
  Assuming your group is working for a company that is considering to be listed on ASX in the near future. Go to the website of Australian Stock Exchange (ASX), do a fact finding and present an analysis of Australian Stock Exchange Listing Requirements and process. The following questions should be addressed: What are the advantages of being a listed company on ASX?What are the problems that need to be taken in consideration for being listed company on ASX?What are the requirements for listing on ASX?What are the steps of listing procedures on ASX?How listing fee is applied. Using ASX listing fee calculator to identify your selected company listing fee, choosing any random number for the ranges of market cap: 10 million -50 million; 50 million-100 million; 100 million-500 million.
2.2 Fact Finding of requirements on Financial advisory service registration in Australia Assuming after graduation you would like to work as a financial adviser. Go to the website of Australian Securities and Investment Commission, do a fact finding and present an analysis of financial advisor registration to identify whether you are qualified and what steps should be taken to be a financial adviser in Australia. The following questions should be addressed: What is the ASIC’s Financial advisers register?Who should be on the Register, who are not on the Register and who updates the register?What information should be on the Register?What are the relevant financial products for a financial advisor?What are the professional standards applied for a financial advisor.
Part 3. Risk analysis and project evaluation
3.1 Perform a scenario analysis with data provided Assume that your selected company is considering a potential project with a new product that is expected to sell for an average price of $30 per unit and the company expects it can sell 350,000 units per year at this price for a period of 4 years. Launching this project will require purchase of a $3,500,000 equipment that has residual value in four years of $500,000 and adding $ 1,000,000 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: $20 Cash fixed costs per year $450,000 Discount rate: 12% Tax Rate: 35%   Do a SCENARIO ANALYSIS with cash flows of the assumed project to determine the sensitivity of the project’s NPV to different scenarios that are defined in terms of the estimated values for each of the project’s value drivers. Please work on two scenarios corresponding to the worst- and best-case outcomes for the project. Your group needs to provide the results in (a) relevant tables:   Worst case: Unit sales decrease by 20%; price per unit decreases by 20%; variable cost per unit increases by 20 %; cash fixed cost per year increases by $200,000   Best case: Unit sales increase by 20%; price per unit increases by 20%; variable cost per unit decreases by 20%; cash fixed cost per year decreases by $200,000
  Based on the scenario analysis outcome, draw relevant conclusion about project NPV’s sensitivity.
3.2 Perform an NPV break even analysis for the case where price per unit decreased by 20%, variable cost per unit increases by 20%, cash fixed costs decreases by $200,000 to identify the number of unit sales that is needed for the project to get break-even Trial and error method is to be used with excel spread sheet.
Conclusion Summarize the outcomes of your group’s works (not more than 300 words)
Presentation: Your group is required to present the assignment outcomes in a video presentation. All members need to participate in the presentation using a PowerPoint slides. The presentation is in no more than 10 minutes. The video presentation should be uploaded to a web-based hosting platform (e.g. Youtube) and your group is required to submit the link to the video via a separate submission link at Blackboard.

Marking criteria

Marking criteria Weighting
1. Research on Australian financial market
1.1. Comparison of four key financial institutions 4%
1.2. Analysis of three financial management questions 4%
2. Fact Finding of Australian financial market regulation
2.1. Fact finding of the listing on ASX (1 mark each question) 5%
2.2. Fact Finding of requirements on Financial advisory service registration (1 mark each question) 5%
3. Risk analysis and project evaluation
3.1. Perform a scenario analysis with data provided 5%
3.2. Perform an NPV break even analysis 5%
4. Academic writing: Presentation, structure and academic writing 2%
Total weight of written report 30%
5. Presentation:  
Presentation content 7%
Presentation skill 3%
Total weight of presentation 10%
Total weight of group assignment 40%