Module Code: HSPV5W-15-5

Module Title: Accounting Information for Business

Component 1 : Tri-sport – Capital Investment Appraisal

Task one

The Board of Directors require you to undertake an investment appraisal to assess the financial viability of the project, making a recommendation to invest or not.

• The Board of Directors expects a report and a spreadsheet containing a range of investment appraisal techniques; supporting details should be included in the appendix to make best use of the word count in your report. The board also expects information from the academic and industry sources about the reliability and application of investment appraisal in practice.

Task two

Contained within the original consultant’s report were a number of caveats, see below, regarding the trends/figures that were used, and the Board are keen to see the impact of these variations when applied to your figures in task one. It is suggested that you present an additional worksheet or table showing their impact upon the project including your assumptions/evidence that underpin your analysis.

• The Turnover figures for the company may be too conservative and could be as much as 25% higher than what is currently used in the financial projections.
• The operational costs may be 20% lower in years four and five due to economies and streamlining through improved technology.
• The cost of goods value may increase to 60% of the turnover figure in the next two years and increase by a further 5% in years three to five.

You should discuss whether the use of your sensitivity analysis affects your decision in task one or further supports it and conclude with a recommendation to the board of directors.

Task three

The Board of Directors would like the company to embrace a balanced score card (BSC) and dashboard with which to monitor future performance of the project.

• Prepare a balance score card for the company which includes the four perspectives. Please note that the case study only covers the financial data, you will need to use your own creativity to prepare suitable objectives and KPI’s for the other three
  perspectives of the balanced score card.
• Develop a ‘live’ dashboard that supports your proposed BSC and explain how you might deal with the qualitative issues that are inherent within any business performance. Note, you may use a self-developed spreadsheet or established

 

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