FNSACC511 Provide Financial and Business Performance - Product Assessment Task

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Product Assessment Task

Part A: Short Activities

Question 1
You are borrowing $250,000 at 5.0 % pa to be repaid over the next 5 years with equal annual instalment. Calculate following:

  1. Calculate the annual repayments by referring to the online help user guide of any Australian bank.
  2. How much is the balance owing on the loan after the 2nd instalment is paid
  3. Draw up an amortisation schedule for the entire loan with labels and titles.

Question 2
Below are the sales record of the music company. To demonstrate knowledge of functions and features of Excel, students are required to create two different spreadsheets and complete the following:

  1. Change the names of both sheets to east, west
  2. Consolidate the data of both sheets on 3rd sheet
  3. Link both the worksheets
  4. Save the workbook on a removable drive
  5. Print the consolidated sheet- submit PDF version of Excel sheet.
  6. Explain the procedure in 100 – 150 words of how the above (task a – c) was completed

Part B: Short Case Studies

Question 1
Dareduna Limited Case Study
Your client Dareduna Limited has had inventory management and ordering issues for an item that they stock- bond007. They have asked you to assist them in understanding the relevant costs associated with the item and establish an Economic order quantity for the item. You need to review existing arrangement and suggest desired re-order point before the next financial year.

Dareduna Limited has provided you with the following data for item bond007:
Inventory usage rate is 100 per week
Safety stock level is: 80 units
Annual demand is 5000 units in total (assume 52 weeks)
Lead time is 3 weeks
Unit price $2
Order cost $ 6.5 per order
Carrying costs $0.35 per unit per year

You are required to complete the following:

  1. Calculate EOQ
  2. Calculate the desired re-order point
    You are required to insert the above data into a spreadsheet clearly labelling all cell references as well as worksheets. Please use formulas/ functions to perform all mathematical calculations in the worksheet clearly showing all workings. Please note your work will be cross-checked against the input you have put in the cells.
  3. Create an EOQ chart out of this data using a macro (You will be required to assume Order quantities in multiples of 100’s). Select this table and chart and print only to *.pdf format and save. Submit along with other files on CANVAS by the due date. Explain how this macro feature would assist the client in the future?
  4. From the data table, find out how much the Total relevant cost is at an order quantity of 630 unit using the HLOOKUP function?
  5. Suggest ways in which your client can implement the EOQ and relay this information in the form of a short report to Dareduna Limited. (200 words)

Question 2
Pixel Limited Case Study
Pixel Ltd has asked you to evaluate an investment option which they are considering investing some vacant funds in. If they invest $4800 at the end of each year for 10 years, they will receive $84,230 at the end of that time. Pixel Limited has advised that they will go ahead with the investment if the interest earned on the investment is greater than 14.5%.

You are required to complete the following:

  1. Calculate the interest rate, which will be earned on the above investment. Evaluate information in relation to the financial profitability.
  2. Calculate the value of interest earned over the 10 years. Based on your calculations should Pixel Limited go ahead with the above investment? Please provide a justification for your suggestion.
  3. You are required to insert the above data into a spreadsheet clearly labelling all cell references as well as worksheets. Please use formulas/ functions to perform all mathematical calculations in the worksheet clearly showing all workings. Please note your work will be crosschecked against the input you have put in the cells. You are also required to represent your suggestions in graphical form and are required to link/embed this chart to your analysis in the corresponding work document as per MS Office 2019 or 2016 procedures.

Part C: Extended Case Study + Role Play

Task 1: Preparing a Statement of Advice
Using the information above, students are required to complete the following activities to prepare a statement of advice:

  1. Respond to Richard’s email to clarify and confirm Richard Limited’s expectations, goals and objectives and ensure any communication gaps are avoided.
  2. You need to identify the legal and financial requirements for Richard Limited in relation to shifting the production line to overseas or regional Victoria (consider the impact of establishing, structuring, and financing the business in this scenario). State which one is the more viable option. Evaluate information in relation to future funding requirements, and statutory obligations.
  3. Analyse the financial information provided by benchmarking it against other organisations and performing a cost – benefit analysis. State any conclusions and how they align with the client’s business and personal objectives (in a).
  4. Develop a plan to review the statement of advice to implement as per the agreed schedule and confirm the date and time for next meeting with Richard.
  5. As their financial consultant, estimate risk profile for Richard Limited to comment on the organisation’s financial health. Calculate the weighted average cost of capital (WACC) and rate of return.
  6. Present your findings to the client as per the organisational procedures/ task requirements, statutory requirements, and standard financial reporting principles. You are required to insert the above data into a spreadsheet clearly labelling all cell references as well as worksheets.
  • Analyse task and determine specifications for spreadsheets then use formulas/ functions to perform all mathematical calculations in the worksheet clearly showing all workings to your solution. Please note your work will be cross checked against the input you have put in the cells.
  • Use suitable spreadsheet design and formats, language and forms of documentation to convey information to client in your presentation.
  • Format cells and use data attributes assigned with relative and/or absolute cell references, in accordance with task specifications and test formulae to confirm output meets task requirements

g) Prepare and document financial and business performance advice based on the findings from tasks A – F for Richard that complies with financial legislation and accounting standards, practices and principles, assesses taxation, compliance and business viability issues faced by clients and assesses risk management options and practices.

Task 2: Role-play
You (Edward) need to set up a time, date and venue for the meeting with Richard (your assessor will play the role of Richard, role play will be held in simulated work environment of RMIT) to:

  1. Discuss at least two (2) financial options and processes with Richard to develop suitable plans (e.g. for short- and long-term financial requirements, meet regulations, business structure etc.) for providing information and achieving the company’s goals within 6 months.
  2. Discuss and justify the best option after the review of the financial plan and communicate how the option is most viable to the company’s current financial state. Suggest how this will be implemented, monitored and reviewed on a regular basis to achieve administrative efficiency and consolidation.
  3. Discuss how risks and contingencies will be managed along the way. These contingencies can be changes in client’s needs or any change in opportunity cost, funding cost or business forecast.
  4. Summarise the key outcomes of the meeting including any agreed criteria against which the plans will be reviewed in future and submitted this via Canvas.

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