Need help Part B Question 5 and 6
Deakin's Bachelor of Commerce and MBA are internationally EPAS accredited. Deakin Business School is accredited by AACSB. Group Assignment MAF203 – Business Finance Trimester 1 2018 DUE DATE AND TIME: Week 9, Friday 11th May, 2018, 5:00pm PERCENTAGE OF FINAL GRADE: 30% Learning Outcome Details Unit Learning Outcome (ULO) Graduate Learning Outcome (GLO) ULO 1: Comprehend conceptual foundation for financial decision-making in a typical business firm. GLO1: Discipline specific knowledge and capabilities ULO 2: Evaluate risk-return trade-off in firm's financial decisions GLO1: Discipline-specific knowledge and capabilities GLO4: Critical thinking ULO 3: Apply relevant analytical techniques for valuation of bond and share, short-term and long term investment and financing decisions and working capital management. GLO1: Discipline-specific knowledge and capabilities GLO4: Critical thinking GLO5: Problem Solving Assessment Feedback: Students who submit their work by the due date will receive their marks and feedback on CloudDeakin on 1st June 5pm. https://www.efmd.org/index.php/accreditation-main/epas http://www.aacsb.edu/ Page 2 of 8 Description / Requirements a) The assignment has a weighting of 30% of your overall mark for the unit. The assignment allocates 100 marks across the two parts A and B. Your group mark will be converted to a score out of 30. All members of the group will receive the same mark if they contribute equally. b) The focus of part A is the relationship between risk and return. This part is worth 46 marks allocated across 4 questions. The questions are designed to enhance your technical skills in the context of risk and return. You will need to be familiar with Excel spreadsheet to do this part. Please c) The focus of part B is on capital budgeting. This part is worth 54 marks allocated across 3 questions. The questions are designed to enhance your analytical skills on evaluating capital projects and your understanding on how firms make investment decisions based on incremental cash flows of the project. Group Enrolments Instruction a) Please go to ‘Group Formation’ discussion forum to initiate a discussion to find group members, or students can discuss with fellow students in their classes/seminars. It is highly recommended all group members exchange their names, student ID numbers, and contact details (email addresses, mobile numbers, Facebook, twitter and etc.) b) All students need to enrol in a group of 3 or 4 students to submit the assignment on CloudDeakin. Individual group is not permitted and won’t be marked. You can form a group with any student from any seminar group (On-Campus or Cloud). The only requirement is that all members should be currently enrolled in MAF203 2018 Trimester 1. c) It is up to the group to manage the group dynamics and get equal contribution from all members. It is a good idea to appoint a leader to direct and coordinate the activities of the group, including allocating tasks (questions) among the group members. All group members are expected to discuss the assignment as a whole and contribute to preparing answers to all questions. Before the final submission of the assignment all group members are expected to review and edit all questions, as appropriate. d) If you are using an Excel spreadsheet for analysis, you need to explain which formula you are using to work out the question, and copy and paste important output of the spreadsheet to the body of your Word document. Alternatively, print out the narrative pages (from Word doc) and the spreadsheets (from Excel file) and scan them into a single PDF which can be uploaded. Please do not upload Excel spread sheets as a separate file. e) The deadline for group enrolment is 5 pm 4 May 2018. Late penalty will apply for late enrolment. Please email Ms. Luna Lu (
[email protected]) if you didn’t enrol into a group on time Page 3 of 8 Submission Instructions a) You need to attach a Statement of Contribution which indicates the work done (in percentage) by each student. Mark is allocated according to individual contribution. The following declaration relating to academic honesty must be made after the title page of the assignment. "I/We certify that the attached work is entirely my/our own except where material quoted or paraphrased is acknowledged in the text. I/We also declare that it has not been submitted for assessment in any other unit or course." b) Only one file (Word document or PDF) should be uploaded for your group on the MAF203 CloudDeakin site. List the names and ID numbers of all group members on the first page of your Word document. Only one member of the group should submit the assignment on CloudDeakin on behalf of all the group members. Assignments sent as e-mail attachments or by mail will not be accepted under any circumstances. ONE WORD file containing • Title page: Group number, student name, student ID • Body/content of the assignment: all questions should be answered in order With quantitative questions, please show your working out clearly and have a brief explanation of each answer. With qualitative questions, please follow the stated word count. References: Harvard referencing style • Statement of contribution • Executive Summary, Introduction and Conclusion is NOT required c) You must keep a backup copy of every assignment you submit, until the marked assignment has been returned to you. In the unlikely event that one of your assignments is misplaced, you will need to submit your backup copy. d) Any work you submit may be checked by electronic or other means for the purposes of detecting collusion and/or plagiarism. e) When you are required to submit an assignment through your CloudDeakin unit site, you will receive an email to your Deakin email address confirming that it has been submitted. You should check that you can see your assignment in the Submissions view of the Assignment dropbox folder after upload, and check for, and keep, the email receipt for the submission. e) Extension of assignment submission has to be applied in writing and approved by Unit Chair. Conditions under which an extension will be approved include: i) Medical conditions of a serious nature, e.g. hospitalization, serious injury or chronic illness. Note: Temporary minor ailments such as headaches, colds and minor gastric upsets are not serious medical conditions and are unlikely to be accepted. However, serious cases of these, with medical certificate, may be considered. ii) Compassionate e.g. death of close family Page 4 of 8 member, family breakdown. iii) Hardship/Trauma e.g. sudden loss or gain of employment, severe disruption to domestic arrangements, victim of crime. Note: late group formation will not be accepted as grounds for extension. Notes • Penalties for late submission: The following marking penalties will apply if you submit an assessment task after the due date without an approved extension: 5% will be deducted from available marks for each day up to five days, and work that is submitted more than five days after the due date will not be marked. You will receive 0% for the task. 'Day' means working day for paper submissions and calendar day for electronic submissions. The Unit Chair may refuse to accept a late submission where it is unreasonable or impracticable to assess the task after the due date. • For more information about academic misconduct, special consideration, extensions, and assessment feedback, please refer to the document Your rights and responsibilities as a student in this Unit in the first folder next to the Unit Guide of the Resources area in the CloudDeakin unit site. • Building evidence of your experiences, skills and knowledge (Portfolio) - Building a portfolio that evidences your skills, knowledge and experience will provide you with a valuable tool to help you prepare for interviews and to showcase to potential employers. There are a number of tools that you can use to build a portfolio. You are provided with cloud space through OneDrive, or through the Portfolio tool in the Cloud Unit Site, but you can use any storage repository system that you like. Remember that a Portfolio is YOUR tool. You should be able to store your assessment work, reflections, achievements and artefacts in YOUR Portfolio. Once you have completed this assessment piece, add it to your personal Portfolio to use and showcase your learning later, when applying for jobs, or further studies. Curate your work by adding meaningful tags to your artefacts that describe what the artefact represents. Page 5 of 8 Assignment Questions Part A: Risk and Return (46 marks) 1. From the risk and return lectures we know that when a stock has high stock price volatility then it is a risky stock. ABC stock prices have very high volatility. However, the beta of the stock is only 0.25. Given the high volatility of ABC stock price explain why ABC has low beta and what kind of risk ABC has? (150 - 250 words) (6 marks) 2. The following table shows the return on Asset A and the market index. The beta of Asset A is 0.6. (20 = 5 x 4 marks) Year Asset A Return Market Return 1980 10% 5% 1981 5% 15% 1982 -6% 9% 1983 18% 11% 1984 -5% -5% 1985 7% 10% a. Assume the risk free rate is 5%. Using the CAPM model what is the expected return of Asset A? b. Compute return per unit risk for asset A and the market. How do you think Asset A has performed compared to the market? c. If you invest all your money in Asset A, what would be a good measure of risk that you are taking on? (100 - 150 words)