ASSESSMENT 3 BRIEF

Subject Code and Title BIZ201 Accounting for Decision Making

Assessment Business Scenario Report

Individual/Group Group (3 - 4 students)

Length 1500 words (+/- 10%)

Learning Outcomes The Subject Learning Outcomes demonstrated by successful

completion of the task below include:
a) Explain the role and importance of financial
information in business decision making.
c) Apply costing, budgeting and investing decisions to
business.
d) Recommend financial decisions to relevant
stakeholders.
Submission Due by 11:55pm AEST/AEDT Sunday of Module 6.1 (Week 11)
For intensive class: By 11:55pm AEST/AEDT Sunday end of
Week 6/Module 6

Weighting 40%

Total Marks 100 marks

Assessment Task
Work in a group of 3-4 students, to calculate financial information for a given business
scenario. Then interpret and analyse these results and explain the role and importance of
financial information in business decision making.

Context
Using Financial Statements of companies to perform calculations, interpreting results and
analysing them will help you develop understanding about how business decisions are made
in the industry considering the available financial information. By completing this
assessment, you will demonstrate the importance of financial information in business
decision making, including the application of costing and capital budgeting techniques to
business decisions.

BIZ201Assessment_3_Brief_Business Scenario Report_Module 6.1 Page 1 of 8

Instructions

1. Download the provided Excel workbook ‘BIZ201_Assessment_3_Student Workbook’

from the Assessment 3 area on Blackboard.

2. Download the ‘Financial Statements Document’ from the Assessment 3 area on

Blackboard. You will use the information contained in this document for the
completion of tasks in this brief.

3. Complete the following calculations and tasks for the given business.

TASK 1: CAPITAL BUDGETING

The company wants to monitor its actual performance of cash flows with the budgeted
performance.

The following table provides a summary of the expected increases or decreases from last year’s
actual figures:

Cash Flow Statement Line Item Increase/Decrease Amount of

Increase or
Decrease
Net cash flows from/ (used in)
operating activities Decrease $330 million
Net cash flows from/ (used in)
investing activities Decrease $770 million
Net cash flows from/ (used in)
financing activities Decrease $440 million
Net increase/ (decrease) in cash and
cash equivalents Decrease $920 million
Cash and cash equivalents at the end
of the financial year Increase $120 million

a) Calculate the budgeted amounts for:

i) Net Cash Operating Cash Flows
ii) Net Cash Investing Cash Flows
iii) Net Cash Financing Cash Flows
iv) Increase/decrease in Net Cash and Cash Equivalents
v) Cash and Cash Equivalents at the end of the period
b) Calculate the variance between actual and budgeted performance on the
provided Excel Workbook within the Task 1 Capital Budgeting worksheet.
c) Indicate whether each one of them is favourable or unfavourable on the
provided Excel Workbook within Task 1 Capital Budgeting worksheet.
d) Comment on company’s approach to prepare budgeted cash flows and make
recommendations for future.

BIZ201Assessment_3_Brief_Business Scenario Report_Module 6.1 Page 2 of 8

 TASK 2: CAPITAL INVESTMENT
The company is planning to invest in a new Hotel. The negotiated purchase price of the
Hotel is $12,000,000. Other costs incurred on the purchase of the Hotel, including stamp
duty and legal fees amounted to $3,000,000. The following table provides a summary of
the expected cash inflows and cash outflows for the Hotel over the next 10 years.
Year Cash Inflows Cash Outflows
1 $2,000,000 $1,500,000
2 $2,100,000 $1,600,000
3 $2,200,000 $1,700,000
4 $2,300,000 $1,800,000
5 $2,000,000 $10,000,000
6 $3,000,000 $2,000,000
7 $3,000,000 $2,000,000
8 $3,000,000 $2,000,000
9 $3,000,000 $2,000,000
10 $3,000,000 $2,000,000

You have been asked to complete the following tasks:

a) Calculate the Net Present Value [NPV] for the investment in the Hotel within Task 2
Capital Investment worksheet. The cost of capital is 8%.
b) Based on your results, make a recommendation for investing into this Hotel
and discuss the significance of the results of your analysis. Highlight other
practical issues that should be taken into consideration.

A copy of the discount table has been added to assist you in your calculations.

Source: https://ebookcentral.proquest.com/lib/think/reader.action?docID=7099265&ppg=507

BIZ201Assessment_3_Brief_Business Scenario Report_Module 6.1 Page 3 of 8

TASK 3: COST-VOLUME-PROFIT ANALYSIS
The company is planning to hold a luncheon event at a hotel it owns. The selling price for the
event is priced at $200. The maximum capacity for the event is 800 people. The associated
costs are given below:
Fixed costs $50,000
Variable costs $80 per unit
The owners are seeking your expertise. Calculate the following on Excel workbook within
Task 3 Cost-Volume-Profit Analysis worksheet.
a) Contribution margin
b) Contribution ratio
c) Units required to breakeven
d) Sales revenue required to breakeven
e) Units required to achieve a target profit of $50,000
f) Sales revenue required to achieve a target profit of $50,000
g) Highlight on the importance of Cost-Volume-Profit analysis and ensure you provide
guidance on the maximum available profit for the event. to the

*IMPORTANT: When completing calculations in the workbook, you are required to show
all workings through appropriate Excel formulas. Providing number results without
evidence of Excel formulas will not be accepted

Referencing
It is essential that you use appropriate APA style for citing and referencing research. Please
see more information on referencing in the Academic Skills webpage. There should be at
least five reliable references used in the report. At least 50% of the references that you use,
must be from Torrens University Library.

Report Format

It is essential that you clearly and effectively communicate your professional writing skills though the
report format and correct use of presentation and grammar. Students must include a cover page,
executive summary, a table of contents, introduction, appropriate headings, and subheadings for
the body of the report, conclusion, and the end reference list. Students may want to include an
Appendix; however, this is not compulsory.

BIZ201Assessment_3_Brief_Business Scenario Report_Module 6.1 Page 4 of 8

Submission Instructions

You must submit two files.

1. Excel Workbook. (Use the following naming convention:
Student1Initials_Student2Initials_Student3Initials_Student4Initials BIZ201_Assessm
ent3_Workbook.xlsx

2. Business Report. Use the following naming convention:

Student1Initials_Student2Initials_Student3Initials_Student4Initials BIZ201_Assessm
ent3_Report.docx

Academic Integrity
All students are responsible for ensuring that all work submitted is their own and is
appropriately referenced and academically written according to the Academic Writing
Guide. Students also need to have read and be aware of Torrens University Australia
Academic Integrity Policy and Procedure and subsequent penalties for academic
misconduct. These are viewable online.

Students also must keep a copy of all submitted material and any assessment drafts.

Special Consideration

To apply for special consideration for a modification to an assessment or exam due to

unexpected or extenuating circumstances, please consult the Assessment Policy for Higher
Education Coursework and ELICOS and, if applicable to your circumstance, submit a
completed Application for Assessment Special Consideration Form to your Learning
Facilitator

BIZ201Assessment_3_Brief_Business Scenario Report_Module 6.1 Page 5 of 8

Assessment Rubric
Fail
Pass Credit Distinction High Distinction
Assessment (Yet to achieve
(Functional) (Proficient) (Advanced) (Exceptional)
Attributes minimum standard)
50-64% 65-74% 75-84% 85-100%
0-49%
13%
Understanding of Does not provide Provides recommendation Provides Provides Provides
capital budgeting for recommendation and / with little justification; that recommendation with recommendation with recommendation with
decision-making or justify; demonstrates basic reasonable justification; thorough justification; thorough and complete
demonstrating limited understanding of capital that demonstrates that demonstrates good justification; that
Total Percentage for understanding of budgeting concept. satisfactory understanding of capital demonstrates excellent
this Assessment capital budgeting understanding of capital budgeting concept. understanding of capital
Attribute = 13% concept. budgeting concept. budgeting concept.

12%
Calculations of capital Most or all Excel Some Excel formulas are Many Excel formulas are Most Excel formulas are Most or all Excel
budgeting for formulas are incorrect. incorrect. correct. correct. formulas are correct.
decision-making

Total Percentage for

this Assessment
Attribute = 12%
15%
Understanding of Does not provide Provides Provides Provides Provides
capital investment for recommendation recommendations with recommendations with recommendations with recommendations with
decision-making and/or justify; little justification; that reasonable justification; thorough justification; thorough and complete
demonstrating limited demonstrates basic that demonstrates that demonstrates good justification, that
Total Percentage for understanding of understanding of capital satisfactory understanding of capital demonstrates excellent
this Assessment capital investment investment decision understanding of capital investment decision understanding of capital
Attribute = 15% decision concept. concept. investment decision concept. investment decision
concept. concept.

BIZ201Assessment_3_Brief_Business Scenario Report_Module 6.1 Page 6 of 8

 Calculations of 15%
capital investment for Most or all Excel Some Excel formulas are Many Excel formulas are Most Excel formulas are Most or all Excel
decision-making formulas are incorrect. incorrect. correct. correct. formulas are correct.

Total Percentage for

this Assessment
Attribute = 15%

15%
Cost-Volume-Profit Does not provide or Provides some analysis on Provides reasonable Provides thorough Provides insightful
Analysis provides limited the importance of CVP and analysis on the analysis on the analysis on the
analysis on the its application to the importance of CVP and importance of CVP and importance of CVP and
Total Percentage for importance of CVP and scenario; demonstrating its application to the its application to the its application to the
this Assessment its application to the basic understanding of scenario; demonstrating scenario; demonstrating scenario; demonstrating
Attribute = 15% scenario; CVP analysis concept. satisfactory good understanding of excellent understanding
demonstrating limited understanding of CVP CVP analysis concept. of CVP analysis concept.
understanding of CVP analysis concept.
analysis concept.

15%
Calculations of Cost- Most or all Excel Some Excel formulas are Many Excel formulas are Most Excel formulas are Most or all Excel
Volume-Profit formulas are incorrect. incorrect. correct. correct. formulas are correct.
Analysis

Total Percentage for

this Assessment
Attribute = 15%

5%

BIZ201 Assessment_3_Brief_Business Scenario Report Module 6.1 Page 7 of 8

 Citation of key Demonstrates Demonstrates use of Demonstrates use of Demonstrates use of Demonstrates use of
resources and inconsistent use of credible and relevant credible resources to good quality, credible high-quality, credible
evidence good quality, credible resources to support and support and develop and relevant resources to and relevant resources
and relevant resources develop ideas, but these ideas. support and develop to support and develop
Total Percentage for to support and develop are not always explicit or arguments and arguments and position
this Assessment ideas. well developed. statements. statements.
Attribute = 10%
5%
Referencing is omitted or Referencing resembles APA, Referencing resembles APA, APA referencing has few APA referencing is correct,
does not resemble APA. with frequent or repeated with occasional errors. Uses errors. Uses more than or mostly correct. Uses
Uses less than five errors. Uses at least five more than five references. At five references. At least more than five references.
references. Less than 50% references. At least 50% least 50% references from 50% references from TUA At least 50% references
references from TUA Library. references from TUA Library. TUA Library. Library. from TUA Library.
Report 5%
Format No headings, Limited headings, Headings and Headings, subheadings, Headings, subheadings
subheadings, and other subheadings, and/or some subheadings and other and other report format and other report format
Total Percentage for report format guidelines report format guidelines requirements are guidelines are guidelines are consistent.
this Assessment are not followed. Report require adjustments. Report consistent with report consistent. Very professional work
Attribute = 5% format and layout not format and layout format guidelines. Very good report provided with an
acceptable in the acceptable in the business Report format and layout excellent report format.
format.
business world. world with some acceptable in the Layout acceptable in the
Layout acceptable in the
improvements required. business world with business world.
minor improvements business world with
required. little to no
improvements required.

BIZ201 Assessment_3_Brief_Business Scenario Report Module 6.1 Page 8 of 8