Principles Of Managerial Finance - Accounting Assignment Help

Assignment Task

Principles Of Managerial Finance

• This assignment requires you to look at the challenges of short and long-term funding sources of a business entity. This is an individual assignment.
• instructions:
• Attempt all questions.
• Maximum of 2,000 words (excluding references and appendices).
• Please follow APA referencing.
• Part A: Long term finance40 marks
• Part B: Short term finance40 marks
• The School of Business has a policy of no late assignments. However, an assignment handed in up to 24 hours late will be marked. A deduction of 20% of the total marks available will be made. Any assignments received more than 24 hours late will not be marked.
• APA REFERENCING AND PLAGARISM:
• Ideas written by someone else can be used in your assessments, whether you are using it as a direct quote (maximum 35 words) or rewriting the idea in your own words, but you need to acknowledge the source of this material. It is important that you respect the intellectual property of other writers and researchers and acknowledge the use of it. All sources must be referenced using the American Psychological Association (APA) format. Examples of correct referencing can be found on the following link:
• If you do not acknowledge the material correctly, whether intentional or otherwise, you will be guilty of plagiarism, which is considered a dishonest practice. Plagiarism will incur deductions depending on the severity of the 'offence' - these penalties can range from mark reductions, to deductions of a percentage of the assessment value, to a zero mark for the whole paper.
• pART a: Long term Finance 40 MARKS
• Background and context:
• This assessment is based on the financial structure of Scales Corporation. You should refer to the annual report of the company (https://scalescorporation.co.nz/wp-content/uploads/2021/03/2020-Annual-Report.pdf). In particular the relevant financial summaries must be viewed see pages 46-49 of the report. From the annual report you will note that a significant portion of their business is involved in Apple production in Hawke’s Bay and Nelson under the ‘Mr Apple’ brand. You may also note that Mr Apple is currently engaged in a programme of expanding and replanting its apple orchards.
• For the purposes of this assignment only a range of assumptions will be made about the future funding requirements of Scales Corporation to enable them to continue their programme of expansion and re-planting. Your answers should be constructed in the context of Scales Corporation as set out in the annual report. However, when constructing your answers, you may identify conflicts between the assumptions in table 1 and the annual report. If these occur table 1 will take precedence although you may note the conflict in your answer.
• Table 1: Assumptions on funding requirements
• Funding required 2021-2 $40,000,000
• Funds likely to be available from retained profits $5,000,000 per year
• You can assume that orchard investments will have no cash returns for three years but the ten-year return (based on IRR) will be 15%
• Required:
• Sources of funding
• Describe the likely approach Scales Corporation would need to take to secure lending from a bank. Your answer should include: identifying likely lenders; likely costs; the expectations of the lender; the likelihood of securing funding of this nature from a commercial banker; type of loan; any other relevant features.(10 marks)
• Describe the likely approach Scales Corporation would need to take to secure lending via a bond issue. Your answer should include: identifying a realistic type of bond that should be issued; likely costs; the expectations of lenders; the likelihood of securing funding of this nature from a commercial banker; any other relevant features.(10 marks)
• Contrast the characteristics of funding from the two sources above.(10 marks)
• Based on the current economic situation, advise the board on the best approach to secure funding required. Explain your reasoning.
• Note: for the purposes of this answer you can assume the board will not consider extension of equity funding,(10 marks)
• Part B: Liquidity40 MARKS
• This part assesses your understanding of the working capital aspect of the treasury function. You should base your answer on a corporation listed on the New Zealand stock exchange. Any company may be selected but all students must select a different organisation. Once you have selected a company email your lecturer. Selections will be accepted on a first come first served basis.
• Based on the annual report of any NZX listed company:
• Evaluate the liquidity position of the selected organisation. In your answer you may wish to: calculate appropriate liquidity ratios; discuss the adequacy of the information available for these calculations; state assumptions you may have applied to allow these calculations; discuss any other limitations that occur in evaluating liquidity from the annual report.
• (10 marks)
• Calculate quantity of the entities working capital. Again, you should state the assumptions you have made and limitations of the information available in the annual report. You should clearly identify each element of the working capital.(10 marks)
• For the selected entity identify the trend in working capital over the past five years. Evaluate this trend taking note of the board’s explanations provided in the relevant annual reports.
• (10 marks)
• Discuss what measures are available to an entity to manage its working capital. In your answer you may wish to include: how much working capital might be ‘ideal’; possible approaches to reducing working capital; pressures to retain more or reduce working capital.

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