College of Business and Law

ACADEMIC YEAR 2022/23

Assessment Brief
Submission and feedback dates
Submission deadline: For Group Presentation (CW1) 6 and 7 December 2022, for Individual
Report (CW2) before 14:00 on 13 December 2022
Group Presentation (CW1) is NOT eligible for 5 calendar day late submission window, CW2
(Individual Report) is eligible for 5 calendar day late submission window.
Marks and Feedback due on: 20 working days after the late submission window date (CW1
is 23 January 2023 and CW2 is 30 January 2023)
N.B. all times are 24-hour clock, current local time (at time of submission) in the UK

Submission details
Module title and code: Fundamentals of Accounting and Finance / Finance &
Economics Principles - UMADNJ-30-M / UMACTA-30-M

Component and type: Component B: Group Presentation (CW1) and Individual Report
(CW2).
Assessment title: Group Presentation / Individual Report
Assessment weighting: 30% per cent of total module mark (CW1: 21% and CW2: 9%)
Size or length of assessment: 15-minute presentation and 1,000-word Individual (no +/-
10% to be used)
Module learning outcomes assessed by this task:
Learning Outcomes Tested by the GROUP presentation and Report for UMADNJ-30-M
• MO1: Apply key tools of financial accounting and corporate financial management and
recommend solutions to business problems.
• MO2: Apply a range of business planning, forecast, evaluation and control tools to real
world situations including sensitivity, scenario and forecast analyses using computer
spreadsheets.
• MO4: Understand conceptual frameworks and fundamental concepts, accounting
standards, and the regulatory framework of financial reporting.
• MO5: Evaluate and make recommendations on the appropriateness of an organisation’s
control and performance measurement systems.

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• MO6: Understand conceptual frameworks and fundamental concepts, accounting
standards, and the regulatory framework of financial reporting.
• MO7: Work in teams and make effective presentations.
Learning Outcomes Tested by the GROUP presentation and Report for UMACTA-30-M
• MO1: Apply and critically evaluate capital budgeting (investment appraisal) techniques.
• MO3: Critically evaluate the merits of alternative sources of finance.
• MO7: Work in teams and make an effective presentation / or write an effective report

Completing your assessment

What am I required to do on this assessment?

Case study

“Construction Holding Ltd”

Your role

You are Harry (or Harriet) Simons, recent graduate and newly appointed assistant to Sonya
Carson, the Director of Capital Investments (CI) for Construction Holding Ltd. Your six-
month probationary period is almost up and you are keen to make a good impression.

Required:

You have been tasked by Sonya to produce the following coursework elements:

1) GROUP PRESENTATION (CW1): A 15-minute presentation on the investment

appraisal of the proposed project for the upcoming meeting of the Board of Directors. The
presentation should include:
• An investment analysis of the proposed project discussed in the attached data. Your
projected cash flows should include the impact of corporation tax, capital allowances
and you should use NPV as the discriminator.
• A scenario analysis, including sensitivity analysis, which shows the effects of a range
of changes in the estimates on the investment project’s NPV value.
• A short discussion of other financial and non-financial factors involved in making
investments in the proposed capital assets.

2) INDIVIDUAL REPORT (CW2): You have been tasked to produce a business report on
the proposed capital investment project (see the following case study) for use by the
Board of Directors in their upcoming meeting. The report should ONLY contain a short
discussion of how risk is taken into account in the investment decision.

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Group Presentation (CW1)
You will form a group of 8 members of your choice (You are not allowed to change your
group). By the end of October, you will be required to submit your group name and members
to the module leaders (the group formation is your responsibility). From that moment on, you
will not be allowed to change group. If you are not in any group by then, you will have to
inform the module leaders who will then allocate you to a group.
The presentations will take place on 6 and 7 December 2022, the presentation schedule will
be released in due course. As usual, full attendance will be expected on both days, even if
your group is not presenting. 10% of your mark will come from peer assessment, you will be
assessing your peers’ presentations. You will need to present your findings professionally and
clearly. Your presentation will be face to face on campus and limited by 15 minutes. You will
be stopped if you have not completed your presentation on time.
Submission of the INDIVIDUAL Report (CW2)
You should submit the completed report no later than 14:00, 13 December 2022, and
electronically via Blackboard. Please note that a late submission window of 5 calendar days
from the submission deadline is available (so 18 December ultimate deadline). Please ensure
that you submit all supporting files in a single Microsoft Word document submission,
Blackboard only allows marking of files included in final submission. You are required to
produce the report individually, working on this report with other students is potentially an
assessment offence. Please refer to the assessment offence section of this assessment brief
for details. The report has a maximum word count of 1,000 words. This figure is for the main
body of the report and does not include tables, appendices and executive summary. Please
refer to the word count policy section of this assessment brief for details.

CASE STUDY
Background
Construction Holding Ltd: Organizational Background

Construction Holding Ltd (CHL) is a privately owned company with revenue of £20 million per
annum, and 200 employees. The company has been operating for 24 years and is well
established in the marketplace. However, despite a national rate of inflation of 4 per cent
per annum over the last few years (which is expected to continue), a general economic
downturn has seen CHL’s nominal revenue reduce at a rate of about 3 per cent per annum.

The company’s main activity is the construction of large industrial buildings. It also provides
maintenance services, mainly for those buildings which it has constructed. CHL has a large
investment in construction machinery, and has always kept up with the latest technology in
the industry. The company has concentrated on developing a corporate image as an
innovative, technologically advanced construction firm, and many of the managers of CHL

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consider that this corporate image has been a major factor in securing large, competitive
contracts in the past.
CHL is subject to corporation tax at 35 per cent, payable twelve months after year end, and a
system of 25 per cent writing down allowance on capital assets,

CHL’s formal capital investment system

An investment in construction equipment is central to the operations of CHL. The organization

has, over many years, developed a detailed system by which capital investment proposals are
considered.
The summary sheet in Exhibit 1 is taken from the firm’s capital investment procedures
manual, and outlines the formal process for capital investment decision-making within CHL.

The current CI decision: purchase of a replacement crane

The Construction Site Manager (CSM) has recently submitted a CI/12 application for the
purchase of a new crane. The new asset would replace an existing crane, which is ten years
old, and which requires major maintenance in order to meet required safety standards.

The CSM has indicated in the January budget setting round that the firm would need to spend
money maintaining the old crane but had not at that stage been aware of any replacement
options. It had previously been expected that the existing crane would see out its remaining
useful life, to be replaced by a more modern crane (the Auto-Lift II, or ‘ALII’). The ALII is
technologically more advanced than the firm’s existing crane, and is able to lift much larger
loads.

The new crane would cost £345,000, which is considerably more than the original £195,000
cost of the existing crane. The CSM consulted with the site accountants, and put forward the
following information in the CI/12 application:
• Description: purchase of an ALII crane to replace an existing crane which is in
need of major maintenance.

• Cost projections: purchase price = £345,000; annual running cost = £60,000. It is

expected that the ALII crane would have a £30,000 scrap value at the end of its
useful life in ten years’ time.

• Projected timescale: available for purchase from Allied Importers Ltd in one
month’s time. Purchase price payable on 31 March of this year (year 0) – the last
day of CHL’s financial year for taxation purposes.

The site accountants and the CSM had agreed that no further information was necessary, as
the CI proposal qualified as a ‘replacement of existing asset’ Class I investment. The CSM’s
CI/12 application has now been considered by the Director of CI, who feels uneasy about

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recommending the ALII crane purchase for funding approval. The Director of CI has called a
meeting of concerned parties to discuss the CI application.
The meeting participants:

The following people are present at the meeting to discuss the ALII purchase proposal:

• Sonya Carson (SC) Director of CI. Sonya is new to this position and is
familiarizing herself with the technical nature of the firm’s operations. She has
an undergraduate economics degree and is considered competent, if perhaps a
little overambitious. However, many longer-serving organizational members
doubt Sonya’s ability to make good decisions regarding investment in an
industry about which she currently knows little. For this reason, her
appointment to the position of Director of CI was controversial.

• Julian Done (JD) Construction site manager. Julian has worked in the
construction industry for 15 years, progressing through the ranks to become
CSM two years ago. He is considered to be competent in his job but is perceived
as uncompromising and confrontational. Julian has no time for ‘the head office
bosses’, and his outspoken manner at meetings has often met with disapproval
from the CEO.

• Franc Silvero (FS) CEO of Construction Holding Ltd. Franc came to CHL seven
years ago when the construction industry was in a boom period. Received much
accolade for record sales levels when he first joined the firm as contracts
director, and so has continued to implement the policies which had met with
success in the past. Franc is now perceived as conservative, and often resists
movement towards new areas of business operations. He has a construction
background, and sometimes feels uncomfortable with his new managerial role
as CEO.

• Henry Morton (HM) Engineering manager. Henry has an engineering degree and
has worked in the trade for eight years, joining CHL three years ago. Henry is
often called to give advice on the technical and operating implications of capital
asset purchases, as well as their probable maintenance costs. Henry keeps up
to date on innovation and new technology in the construction industry, and in
his opinion, is well respected. However, Henry has in the past been frustrated
in several attempts to introduce advanced technology into CHL’s construction
equipment and blames this on the conservative approach of Franc Silvero.

The meeting

The meeting called by Sonya turned out to lengthy and lively. There was a considerable
debate, and the following excerpt reflects the main comments raised by the participants.

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SC: Look Julian, there just isn’t enough information here. I have to be able to work out the
new crane’s NPV and payback period. In the past, if projects haven’t had a positive NPV at a
required rate of return of 25 per cent, and paid back within five years, then they haven’t been
approved. Do we know anything about the financial benefits which the ALII might produce?
What advantage is there in buying this thing now? Couldn’t we just let our old crane run its
course and consider our options once it reaches the end of its useful life in few years’ time?

FS: Yes, I think we need to look more closely at the details here. Julian, what do you think the
outlook is if we stay with the old crane?

JD: The old crane really needs some maintenance work done on it, to bring it up to safety
standards. If we spent about £40,000 on maintenance straight away it should be OK until it
goes out of commission in five years’ time.

FS: What does it cost to run the old crane?

JD: Running costs are around £40,000 per annum. Plus, the crane’s getting unreliable. I
reckon there’s about a 50 per cent chance that it will break down at some time during the
year. If it does, we lose three day’s productivity on a job at a cost of around £15,000, not to
mention the cost of fixing it, which was £10,000 last time. Even once it’s fixed there’s still a
50 per cent chance it could break down again within the next twelve months.

FS: What if we go for the ALII?

JD: The running costs would be a bit higher, as it’s a finely tuned machine and needs regular
maintenance. I reckon we’re looking at about £60,000 a year, judging by the recommended
service programme. But, at least it’s not likely to break down. Also, I’m sure that the ALII
would improve our chances of winning contracts, as it’s faster and it will help keep costs
down. Take for example that Storex contract we missed out on last month. The kind of cost
savings we could get with the ALII could have won us that bid, and jobs like that are worth
around £40,000 pre-tax profit to CHL. We could pick up a couple more like that one each
year, maybe more.

FS: How would you rate the chance of picking up more work with the ALII?

JD: Well, probably about 60 per cent chance that we’d get another two like the Storex job
each year, and perhaps about 20 per cent chance of doubling that. It’s hard to say really, but
the customers out there are feeling the pinch. We’ve got to watch our cost competitiveness
if we want to stay in the game.

HM: That’s a key point here, I think. We’ve got to take a long-term view. The way I read it,
these ALII cranes will take over the market in the next two years, and by the time we came to
replace the old crane five years from now, we’d be looking at buying an ALII anyway. The
question is, do we get in on the new technology now, or in five years’ time? We really can’t
assume that the status quo will continue if we don’t go for the ALII now. We’re looking at a

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fall in price competitiveness, company image and profits if we don’t move with the times. If
we do go with the ALII now, we’ve got an edge over our competitors. Even then, we wouldn’t
want to hang on to the ALII for more than ten years. We need to keep upgrading to keep
ahead of the game.

JD: I can’t see what the problem is with these numbers Sonya has to crunch. It’s only an asset
replacement, and I’ve given you all the information the manual says you need. Besides, I told
everyone in January that we’d need to spend some money on the crane, so we all knew this
was coming.

FS: That’s true, Julian, but we’re talking £345,000 now, whereas we only expected to spend
£40,000 on maintenance. I’m not at all sure that we want to get into experimental technology
anyway, it seems pretty risky. What’s wrong with maintaining the old crane, as planned? It’s
still got five years left in it, and they’re pretty hard to sell second-hand. It’s in our books at
£10,981 after accumulated WDAs. We’d probably only get about £20,000 for it if we want to
sell it, which isn’t much more than the £5,000 scrap value we’d get for it in five years’ time.
SC: Julian, perhaps you, Henry and I can sit down and draw up the figures, including the cost
and benefit information you’ve mentioned today. Then I can run the numbers and see if it
meets our investment criteria.
There’s just a couple of things that bother me, though. It doesn’t seem right to use the same
required rate of return for every project. We should be using different rates for different
types of projects. I’ve been playing around with a few numbers, and it seems to me that 25
per cent is too high. It might be OK for risky projects that are something new to us, but here
we’re talking about a crane. That’s run-of-the-mill stuff for CHL, and it seems to me that a 20
per cent nominal required return would be more appropriate.
Also, looking at past records of CI analyses, it looks like the 25 per cent rate has been used as
a real discount rate, when it is actually calculated to represent a nominal rate. We really need
to do some inflation adjustments to the rates we’re using,
JD: This is all gobbledegook to me. Perhaps that’s the problem here – we’re so tied up in the
numbers that we can’t see a good investment when it hits us in the face!

FS: We have to be sure that any investment is financially viable, Julian. Sonya, why don’t you
run the numbers both ways: the way we have in the past, and again using a rate you think is
appropriate. I’d be interested in seeing what difference it makes, although there’s never been
a shortage of projects in the past that have made the 25 per cent grade. I hope you wouldn’t
be cutting it too fine using a rate like 20 per cent. It doesn’t seem to leave much margin for
error if our project estimates turn out to be wrong.

SC: I’ll run the numbers, but the best way of dealing with margins for error is by getting things
right in the first place. There’s still a lot of uncertainty on this project. All we’ve got so far are
‘feeling’ and estimates – do you think we can firm up those figures at all?

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JD: No. There just isn’t any other information. Look, I’ve been in this industry since before you
finished school – I’ve learnt enough to know what’s what. I can tell you now that sooner or
later we’ll need a new crane to be able to do our jobs, and doing our jobs is what makes
money for this company!

FS: OK, Julian, no one doubts your judgement. Sonya, how about doing what you suggested,
and sitting down with Henry and Julian. They should be able to give you the technical
information, and you can work through the numbers. I’d like to see the IRR too – I’ve never
been able to understand why we don’t calculate IRR. I know a lot of other firms that do.

HM: Maybe we could think about changing the CI procedures manual too. That way, the
technical people will know exactly what information the director of CI needs and things can
be settled faster.

SC: Fine, that’s a good idea. Look, I know we haven’t resolved this, but thanks for coming to
this meeting. Perhaps we can all get together again in a week’s time to make a decision.

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EXHIBIT 1
Construction Holding Ltd. Capital investment procedures – summary

Capital investment (CI) is defined as ‘any major expenditure on purchasing, construction or upgrading
capital assets, the benefits from which will accrue over several years’.

1. In early January of each year the CI budget is determined. The total amount of available funds
for CI expenditure is determined by the directors, based on what they consider the company can
afford.

2. Later that month, divisional managers meet to discuss forthcoming CI requirements, and the
budget allocated across divisions. Managers must present their proposed CI requirements under the
following three headings:
(i) essential replacement of existing assets (Class 1);
(ii) strategic expansion (Class 2);
(iii) safety and regulatory expenditure (Class 3).

The final allocation across divisions is a decision taken jointly by the CEO and the director of CI.

3. Throughout the year, access to funds for investment requires the submission of a standard
form CI/12 – Capital Expenditure Application. The information normally required with such as
submission includes:
(i) a description of the proposed investment;
(ii) motivation for the investment, i.e. what will the investment achieve for the company;
(iii) financial projections of the cost of the investment;
(iv) projected future financial benefits of the investment;
(v) key success indicators for the investment (used for assessing the riskiness of the
project and for subsequent post audit);
(vi) a projected time-scale for completion of the investment. However, proposed Class 3
projects may dispense with items (iv) and (v), and those in Class 1 may dispense with items
(ii), (iv) and (v).

4. The CI/12 form is assessed by the director of CI, who has the following options:
(i) accept the proposal and forward it to the CEO for financing approval; (ii) refer the
proposal back for further refinement; (iii) reject the proposal.

CI proposals will be assessed with regard to the net present value (NPV) and payback period (PP) of
the proposed project, although Class I projects will be considered as ‘cost minimization exercises’,
since there is already an accepted need to continue with current operations and assets, and Class 3
projects are not required to meet financial criteria.

5. All CI projects are assessed within a ten-year planning horizon, i.e. investment effects beyond
this ten-year horizon are considered uncertain, and are ignored.

6. If approved, a CI proposal is then allocated funds from the annual budget. A project supervisor
is then assigned, and this person is responsible for the implementation and reporting of the CI project.

7. In due course, some selected CI projects will be subject to post audit by the director of CI.

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Where should I start?
Carefully read the entire assignment brief, including its requirements, and attend the
tutorial dedicated to the assignment. Meet with your group and work on the case study.
Each member is expected to contribute as a team. 4 or 5 meetings should suffice. For the
individual report read well the question and research materials in articles or textbooks to
form the background for your personal elaboration.

What do I need to do to pass?

Please refer to the marking criteria and the requirements of the assignments. You need to
address the requirements of each task. Do not answer different questions/tasks other than
the required. Do not write about the results of the investment appraisal conducted in the
groupwork in the individual report. The individual report is discursive by nature and we do
not require any investment appraisal in it.

How do I achieve high marks in this assessment?

Please refer to the marking criteria and the characteristics of work that achieves a
distinction - Grade A.

How does the learning and teaching relate to the assessment?

The investment appraisal part (first 4 lectures) is fundamental for the assignment.

What additional resources may help me complete this assessment?

• All Blackboard material on Investment Appraisal

• You can consult staff up to 23rd November 2022. Support given will be limited to
exploring the possible interpretations of the assignment.
• Your independent research and active contribution to the group work are also
important.

What do I do if I am concerned about completing this assessment?

UWE Bristol offer a range of Assessment Support Options that you can explore through this
link, and both Academic Support and Wellbeing Support are available.
For further information, please see the Academic Survival Guide.
How do I avoid an Assessment Offence on this module? 2
Use the support above if you feel unable to submit your own work for this module.

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Avoid plagiarism (taking sentences, arguments, and chunks from somebody else’s work - for
instance from the Internet) and collusion with other students (that is working together on
the same piece of work) and other types of assessment offences. Make every effort to write
your own sentences with originality (not copied). Avoid contract cheating as having the
work done by someone else is a serious offence and is punished very heavily. Please refer to
the UWE webpages for further information at Assessment offences - Assessments | UWE
Bristol.

Marks and Feedback

Your assessment will be marked according to the following marking criteria.
You can use these to evaluate your own work before you submit.

Group Presentation Marking Scheme

Group Name:
Team members’ names (8 members) Student Numbers
1.
2.
3.
..

For each criterion, rate the presentation between 1 (very poor) and 10 (very good)
Criteria Score Weight Total
Organisation 30%
• Clear introduction
• Rationale presented to support arguments
• Conclusion logically drawn from rationale
• Logical flow of discussion
Content 40%
• Topic addressed satisfactorily
• Reasoning clearly with valid logic
• Evidence presented to support key points
• Critical evaluation of the case scenario in
arriving at recommendations
Team work and Q&A section 20%
• Clear demonstration of each member
contributing during the presentation and Q&A
• Individual accountability demonstrated during
Q&A
• Prompt answers, creative reasoning and
persuasiveness
Visual aids and overall oral presentation 10%
• Proper use of visual aids
• Engaging with the audience
• Volume, enunciation, eye contact, gesture
Final Mark
Feedback From: Date:

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Strengths of this assignment are:

Main ways to improve this assignment are:

Group Presentation Mark

Mark Peer Assessment Mark Final Mark

Individual Report Marking Scheme

Student Number:

Feedback From: Date:

Strengths of this assignment are:

Main ways to improve this assignment are:

Individual Report Mark

Mark Final Mark

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Marking Grid
Issue Grade A Grade B+ Grade B Grade C Refer/Fail
Relevance to Assignment’s Clear focus on Mainly Some of the Makes no
assignment brief aims and themes the themes of the focused on the writing is focused attempt to
are integral to the assignment. themes of the on the themes of address the
assignment. assignment. the themes of the
assignment. assignment.
Extent of evaluation Evaluation Good clear Evaluation Some attempt No attempt
within evidence of reasonably at evaluation at
assignment evaluation well carried within evaluation
rigorous and carried out out assignment. within
appropriate. within assignment
assignment.
Quality of Analytical and Good Evidence of Limited evidence Unsubstantiated/in
reasoning clear conclusions development as findings and of findings and valid conclusion,
well- grounded in shown in conclusions conclusions based on
theory and summary of grounded in supported by the anecdotes and
literature, arguments based theory/literature. literature and generalisations
showing on theory. only.
development of theory/literature
new concepts. and beginnings
of synthesis.
Skill at facilitating Excellent Clear evidence Some ability to Some ability to Inability to
discussion enabling of ability to stimulate and facilitate stimulate/
pacing and stimulate, facilitate discussion but facilitate
summarising facilitate and discussion or tendency to miss discussion.
of discussion. summarise be directive. opportunities.
discussion.
Clarity and Clarity of Thoughts and Language Meaning Purpose and
quality of written expression ideas clearly mainly fluent. apparent but. meaning of
expression excellent. expressed. Grammar and ...... language assignment
Consistently Grammar and spelling mainly not unclear.
accurate use of spelling accurate and always fluent, Language,
grammar and accurate with language fluent grammar and grammar and
spelling fluent. spelling still poor. spelling poor.
professional/acad
emic
writing style.
Understanding Work shows a Consistent Demonstrates Attempts a logical Fails to
of subject well-co- understanding understanding and coherent demonstrate
ordinated, demonstrated in in a style which understanding of understanding
grounded and a logical, is logical, the subject area. of the
reasoned coherent and coherent and subject/topic
understanding of lucid manner. flowing. area.
topic
and its
relevance to
practice
Referencing Referencing Referencing Minor Referencing Referencing
clear, relevant relevant and inconsistencies present but had inaccurate or
and consistently and inaccuracies
accurate using mostly accurate in referencing inconsistencies absent.
the Harvard using the Harvard using the and inaccuracies.
system. system. Harvard system.
Use of literature Has developed Ability to Clear evidence Evidence of some Little or no
own ideas and appraise and application limited reading evidence of
justified using a critically the of readings around the subject reading around
wide range of theory and relevant to the the subject.
sources of literature from a subject within
theories and variety of the text.
literature which courses,
has been developing own
thoroughly ideas in the
analysed, applied process.
and
tested.

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1. In line with UWE Bristol’s Assessment Content Limit Policy (formerly the Word Count
Policy), word count includes all text, including (but not limited to): the main body of
text (including headings), all citations (both in and out of brackets), text boxes, tables
and graphs, figures and diagrams, quotes, lists.

2. UWE Bristol’s UWE’s Assessment Offences Policy requires that you submit work that
is entirely your own and reflects your own learning, so it is important to:
• Ensure you reference all sources used, using the UWE Harvard and the
guidance available on UWE’s Study Skills referencing pages.
• Avoid copying and pasting any work into this assessment, including your own
previous assessments, work from other students or internet sources
• Develop your own style, arguments and wording, so avoid copying sources
and changing individual words but keeping, essentially, the same sentences
and/or structures from other sources
• Never give your work to others who may copy it
• If an individual assessment, develop your own work and preparation, and do
not allow anyone to make amends on your work (including proof-readers,
who may highlight issues but not edit the work) and
When submitting your work, you will be required to confirm that the work is your
own, and text-matching software and other methods are routinely used to check
submissions against other submissions to the university and internet sources. Details
of what constitutes plagiarism and how to avoid it can be found on UWE’s Study
Skills pages about avoiding plagiarism.

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