PGBM134 Finance and Project Management
14/06/2022 (23:59 GMT)
Module Leader: Neil Parkin
Internal Moderator Peter Coleman
Weighting – 100% of the marks for this module
This is an individual assignment of 4,000 words (+/- 10%). The word count is for
Students are required to submit their coursework through Turnitin. Only assessments
submitted through Turnitin will be marked. Any other submission including submission
to your study centre in hard copy will be treated as a non-submission.
Part A of the assessment is compulsory for all students with a marking allocation of
50% awarded within this element.
Part B of the assessment is compulsory for all students with a marking allocation of
50% awarded within this element.
The assignment has been designed to cover the following learning outcomes
associated with successful completion of the module:
K1. Critical understanding of the key strategic decisions that a business may have to
make and appreciated how accounting and finance can assist in making and
evaluating those decisions.
K2. Critical understanding of specific analytical skills in key decision areas within
strategy and finance relating to Ratios and Investment Projects.
K3. That they can appreciate the requirements for management control and
the application of project control processes.
K4. A critical understanding of the relationship between, cost and quality in
achieving project objectives.
S1. Competence in applying the key valuation concepts and methodologies of
financial decision making in order to contribute to the wider decision making of
S2. Their capability to evaluate projects from a financial, human resource and time
PART A (50%)
Question 1 AA Dent plc (25%)
The finance manager of AA Dent plc is evaluating two mutually exclusive projects with
the following cash flows.
The company’s current return on capital employed is 10 per cent (average investment
basis) and the company uses straight-line depreciation over the life of the project i.e.
5years with a 0 zero residual value. (straight line depreciation means equal monetary
amount of depreciation each year).
|(a)||Advise AA Dent plc which project should be undertaken using:|
|the payback method of investment appraisal
the accounting rate of return (ARR) method of investment appraisal:
the net present value method of investment appraisal. (16%)
|(b)||Critically assess and discuss the problems that arise for the net present value
method of investment appraisal when capital is limited, and explain how such
problems may be resolved in practice. (9%)
Question 2 Moore Electronics (25%)
Moore Electronics manufactures electrical components, which are sold to industrial
users. The abbreviated financial statements for each of the last two years are as
|Year||Project X (£)||Project Y (£)|
Income Statement for the year ended 31 December
|Cost of sales||(880)||(980)|
|Profit before taxation||334||229|
|Profit for the year||248||185|
Statements of financial position as at 31 December
Property, plant, and equipment
|EQUITY AND LIABILITIES
Capital: (£1 shares)
Borrowings – bank loan
|Other payables and accruals||29||28|
|Short-term borrowing (all overdraft)||113||143|
|Total equity and liabilities||1,074||1,231|
Dividends were paid on ordinary shares of £90,000 and £94,000 in 2019 and 2020,
Calculate the following financial ratios for both years (using year-end
figures for statement of financial position items):
i. Return on capital employed. (2%)
|Operating profit margin.
Gross profit margin.
Acid test ratio.
Settlement period for trade receivables.
Settlement period for trade payables.
Inventories turnover period.
Produce a report for the Board of Directors of Moore Electronics that evaluates the
performance of the company across the two years within the areas of profitability, liquidity, and
efficiency. You may wish to suggest methods for improving these key indicators and the overall
performance of the business. (9%)
PART B (50%)
Question 3 Aluminium Manufacture Corporation (50%)
The Aluminium Manufacture Corporation designs and manufactures aluminium for the
construction sector for years; the company enjoyed a stable marketplace and a
relatively predictable business environment. Although there had been a boom in
residential construction in recent years, commercial work was on the decline. As a
result, all the aluminium manufacturers were going further afield to big jobs. In order
to survive, Aluminium Manufacture Corporation was therefore forced to bid on jobs
previously thought to be out of their geographical area. Survival depended upon
staying competitive. However with the declining conditions of the market and the
evolution that had drastically changed the character of the market place, the
Aluminium Manufacture Corporation previously successful approach was now in
With the removal of trade barriers and other Globalized international trade
agreements, the Aluminium Manufacture Corporation found itself competing with
other aluminium manufacturers headquartered in countries around the world. A
decision was then made to transfer several manufacturing machines to a new site in
Eastern Europe to allow more agility and efficiency within their manufacturing supply.
The project was to include the transfer of 6 industrial aluminium processing machines,
along with ancillary equipment into Central Europe (Hungary). Scheduling the project
had to take five months from end of October before production must start on April to
supply potential customers. A site had been selected although the appointed Project
Manager and potential team members had not visited the area, nor did they understand
the weather conditions of wind, rain and snow that prevailed in this area. The
processing machines were to be transported by sea and then road haulage before
arriving at the new site. Road infrastructure was again an area that required attention.
Frank Smith has been appointed as the Project manager for this installation transfer.
He is a 31-year-old graduate of a well known University in the UK with a first degree in
Mechanical Engineering. After graduation, he worked for six years in Engineering
Design Industries. Although he took a significant pay cut, he jumped at the opportunity
to return to his home location with Aluminium Manufacture Corporation. His job in
Engineering Industries had been very demanding. The long hours and extensive
travelling had created tension in his marriage. He was looking forward to a normal job
with reasonable hours, or so he thought. While working in Engineering Design
Industries, Lewis worked on projects and installed new Engineering designs. He was
confident that he had the requisite technical expertise to excel at his new job with the
Aluminium Manufacture Corporation.
Frank had a part-time team of four assistants on placement from the departments within
Aluminium Manufacture Corporation. At first, he was not sure how freely he could
delegate work to the assistants bearing in mind they also reported to other managers
within the organisation. He quickly realised that they were all very bright, competent
workers who were anxious to leverage this project experience into a lucrative career.
The project transfer has an investment of 1 Million pounds and is scheduled to take 5
months to complete; taking into account, the project would be completed during the
winter which would be difficult. Lewis and his team would first need to visit the new
location and start to consider the project activities.
You are required to prepare a report concerning the main issues to be addressed by
Frank Smith from a project management perspective.
From a project management perspective base on Project life cycle outline the
activities required to be completed by Frank Smith to successfully implement this new
initiative. Note that Frank Smith is only Project Managing the transfer of equipment
and not the actual facility building project. Assume the building has already been
Your report should be based on the four stages of Project life cycle and include
examples of the concerns, Project Life cycle stages, associated with managing the
lifecycle of this major project.
In your Project Report you must at a minimum provide the following:
|Project Scope Statement.
Work Breakdown Structure (with brief details of work packages).
Cost appraisal methods (theory) that could be used to ensure that the project can be
delivered on-time and within budget.
v. Any other relevant table or information as an Appendix.
Note also that any practical examples in relation to relevant theories should be derived
from the case study.
Generic Assessment Criteria – Postgraduate: PGBM134 – Finance and Project Management
|Grade||Relevance||Knowledge||Analysis||Argument and Structure||Critical Evaluation||Presentation||Reference to Literature|
|The work examined is exemplary and provides clear evidence of a complete grasp of the knowledge, understanding and skills appropriate to the Level of the qualification. There is also
unequivocal evidence showing that all the learning outcomes and responsibilities relevant to that Level are fully satisfied. At this level it is expected that the work will be exemplary in all the
categories cited above. It will demonstrate a particularly compelling evaluation, originality, and elegance of argument, interpretation or discourse.
|76-85%||The work examined is excellent and demonstrates comprehensive knowledge, understanding and skills appropriate to the Level of the qualification. There is also excellent evidence
showing that all the learning outcomes and responsibilities appropriate to that level are fully satisfied. At this level it is expected that the work will be excellent in the majority of the categories
cited above or by demonstrating particularly compelling evaluation and elegance of argument, interpretation or discourse and some evidence of originality.
|70 – 75%||The work examined is of a high standard and there is evidence of comprehensive knowledge, understanding and skills appropriate to the Level of the qualification. There is clearly
articulated evidence demonstrating that all the learning outcomes and responsibilities appropriate to that level are satisfied. At this level it is expected that the standard of the work will be
high in the majority of the categories cited above or by demonstrating particularly compelling evaluation and elegance of argument, interpretation or discourse.
|60 – 69%||Directly relevant to
the requirements of
knowledge of relevant
material, showing a
clear grasp of
and issues therein
analysis – clear and
|Well supported, focussed
argument which is clear and
|Contains distinctive or
and begins to formulate
an independent position
in relation to theory
|Well written, with
standard spelling and
grammar, in a
readable style with
|Critical appraisal of up-to
date and/or appropriate
literature. Recognition of
different perspectives. Very
good use of a wide range of
sophisticated source material.
|50 – 59%||Some attempt to
requirements of the
drift away from this in
of a fair range of
relevant material, with
of an appreciation of
which has a clear
|Generally coherent and
logically structured, using an
appropriate mode of
argument and/or theoretical
|May contain some
may begin to formulate
an independent position
in relation to theory
with only minor lapses
|Uses a good variety of
literature which includes
recent texts and/or
including a substantive
amount beyond library texts.
Competent use of source
|40 – 49%||Some correlation
requirements of the
there are instances
of the subject but
addressing a limited
range of material
treatment, but may
be prone to
description, or to
|Some attempt to construct a
coherent argument, but may
suffer loss of focus and
consistency, with issues at
stake stated only vaguely, or
theoretical mode(s) couched
in simplistic terms
|Sound work which
expresses a coherent
position only in broad
terms and in uncritical
conformity to one or
more standard views of
|A simple basic style
but with significant
expression or format
that may pose
obstacles for the
|Evidence of use of
appropriate literature which
goes beyond that referred to
by the tutor. Frequently only
uses a single source to
support a point.
|Fail||35 – 39%||Relevance to the
requirements of the
assessment may be
very intermittent, and
may be reduced to
its vaguest and least
understanding of a
narrow range of
or narrative, with
little evidence of
|A basic argument is evident,
but mainly supported by
assertion and there may be a
lack of clarity and coherence
|Some evidence of a
view starting to be
formed but mainly
writer may achieve
clarity (if at all) only by
using a simplistic or
|Barely adequate use of
literature. Over reliance on
material provided by the tutor.
|The evidence provided shows that the majority of the learning outcomes and responsibilities appropriate to that Level are satisfied – for compensation consideration.|
|30 – 34%||The work examined provides insufficient evidence of the knowledge, understanding and skills appropriate to the Level of the qualification. The evidence provided shows that some of the
learning outcomes and responsibilities appropriate to that Level are satisfied. The work will be weak in some of the indicators.
|15-29%||The work examined is unacceptable and provides little evidence of the knowledge, understanding and skills appropriate to the Level of the qualification. The evidence shows that few of the
learning outcomes and responsibilities appropriate to that Level are satisfied. The work will be weak in several of the indicators.
|0-14%||The work examined is unacceptable and provides almost no evidence of the knowledge, understanding and skills appropriate to the Level of the qualification. The evidence fails to show
that any of the learning outcomes and responsibilities appropriate to that Level are satisfied. The work will be weak in the majority or all of the indicators.
Source: AQH-F6-15 Guidelines on Generic Assessment Criteria,
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