The academic misconduct policy and procedure

MN7029 Summative Assessment 2

This summative assessment is an individual coursework. It is a report on a case study.

The deadline for submission of your presentation is 3pm Friday 27th January 2022.

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2 Assessment Brief

2.2 The Question

2.2.1 Background information

R&D Team

“We’ve spent quite a lot on developing this project - £450,000 – and it would be a shame if we didn’t get it to market. I would estimate that we would need to spend around and other £60,000 on research costs to get it to a position where it is ready to launch”.

The Marketing director

“I’ve done some research on the potential pricing of the watch and likely customer targets and worked with someone in the finance team to look at pricing. I think our wholesale sales price should be £150 per watch over the course of the whole 5 years. The cost of the raw materials makes up 40% of the sales price. My team have estimated that sales for the first 5 years should be as follows:

After 5 years we think that the tech will have advanced beyond this and the product will no longer be attractive so we are assuming that the life of this project will probably only be until then before we need to make a new investment, and we are constantly innovating other projects. The machine will not have any scrap value at this stage.

We’re planning an advertising and marketing campaign costing £545k in year 1 to get started and these costs will the same in in year 2 and 3, and fall to £190k in years 4 and 5. Oh, and HR have just confirmed that the Supervisor salary and benefits will start at £36k in year 1 but we expect inflationary rises to be 3% year on year. That includes our National Insurance costs”

The business has previously been using an estimated Weighted Average Cost of Capital of 20% and the management team would like to see your calculations using the WACC you have calculated and the original estimate of 20%.

2.2.2 Your task

4. A financial evaluation of the project using the NPV and Payback Period Methods including:
a. Your calculations of NPV and Payback period for the project using WACC (the detail should be in the Appendix of the report and should be calculated in Excel)
b.
Your calculations of NPV and Payback period for the project using the previous business cost of capital of 20% (the detail should be in the Appendix

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Your report should have an executive summary at the start and a conclusion at the end and you should conclude on the viability of the project at the current cost of capital and the situation if cost of capital were 20%.

Please also remember to include a voiceover recording (no more than 5 minutes) on the executive summary page highlighting your executive summary and conclusions regarding the project.

 Calculation and critical evaluation of WACC (detailed calculation may be shown in an Appendix)

 Projected cash flow

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 Conclusion

The assessment is marked out of 100. The following shows the mark allocation and the

approach required for each section. In the next section you will find the general Level 7


A projected cash flow for the project	15 marks


A decision as to whether the project should go ahead and your justification for this decision	5 marks

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	Level 7 General Marking Scheme

	Achievement level
	made of digital technology.
	Solutions and recommendations demonstrate ethical appreciation and awareness of the need for corporate responsibility. Evidence of substantial reading, study and sense making beyond the course content and of independent thought. Comprehensive citations, and correct use of the Harvard style in the reference list.
Merit


	Some use of tables, diagrams and other figures in supporting the text and presenting key messages. Numeric analysis that is mostly complete and free from significant or critical errors with appropriate application of methods
	A weak piece of work showing only limited knowledge and understanding of course content with substantial errors or omissions. Mainly descriptive with little or no analysis, synthesis and evaluation, and no independent thought. Ethical and corporate responsibility issues are not considered.

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