Research on Financial market and Capital Budgeting Analysis

Research on Financial market and Capital Budgeting Analysis


Purpose of the assessment (with ULO Mapping)

Students are enrolled a group up to 4 members to study, undertake research, analyse and conduct academic work within the topics of financial management from week 1 to week 9. (ULO 1, 2, 3 and 4)
Weight 40 % of the total assessments
Total Marks 40
Word limit Not more than 3,000 words
Due Date Final Submission of Group Assignment and Presentation: 11:59 pm Sunday, Week 10


Submission Guidelines

• All work must be submitted on Blackboard by the due date along with a completed assignment cover page. Make sure that your group member’s name and surname, student ID, unit name, and code and lecture’s name are written on the cover sheet of the submitted assignment. A table of contribution by group members into group work is also to be provided in the cover page (please see the assignment cover page attached).
• The assignment must be in MS Word format, no spacing, 12-pt Arial font and 2 cm margins on all four sides of your page with appropriate section headings and page numbers.
• Reference sources must be cited in the text of the report, and listed appropriately at the end in a reference list using Harvard referencing style.
• Submitted work should be your original work showing your genuine studying. Evidence of your original work (allocation of tasks, discussion, file exchanges, drafts, etc.) need to be presented in the records of your group work in Discussion Board, available in Subject Tools, Black Board. Your assignment WILL NOT BE MARKED by your lecturers if the evidence of your group work does not shown in the Discussion Board.
• Three attempts of submission are allowed for checking similarity and final submission. Your lecturers only mark the final submission. As a guide, a similarity score of over 30% is considered as excessive except in the cases where the similarity is caused by the use of template provided by the lecturers, types of assignment, references or sources of data. Please note that it takes 48 hours for the self-check report to be available for your viewing. Please also note that fact findings and working at same case study project evaluation assignment like this one may yield higher than 30% similarity. Therefore, do not panic and shower your lecturers with emails about similarity after your submission if your work is genuine. Your lecturers will look at details of the similarity report and ensure a proper marking without any bias on that threshold 30%.
HI5002 Finance for Business Group Assignment T3 2019
• When you submit your assignment electronically, please save the file as ‘Group Assignment- your group name.doc’. You are required to submit the assignment at Blackboard/Assessments/Group Assignment and Submission Link.

Always keep an electronic copy until you have received the final grade for the Unit. Please make sure that you submit the correct file in the correct format that is readable in Black Board. ANY APPEAL RELATING TO SUBMITTING WRONG FILES AND WRONG FORMAT AFTER THE DEADLINE WILL NOT BE CONSIDERED.
ASSIGNMENT SPECIFICATIONS
Assignment Tasks
This assignment task is a written report that include 3 parts: Part 1 is a research and fact finding on Australian financial market. Part 2 is a fact finding of financial market regulation in Australia and Part 3 is a risk analysis and project evaluation.

To complete the assignment, groups are recommended to obtain data and information from relevant web sites, especially websites of Australia Stock Exchange: www.asx.com.au; Australian Securities and Investment Commission: https://asic.gov.au/ and the Australian Prudential Regulation Authority (APRA) https://www.apra.gov.au for their research and fact finding. Using secondary data (researches done by others) for fact findings in Pat 1 and Part 2 is NOT RECOMMENDED and will be PENALIZED.

Please also note: group assignment for HI5002 is DIFFERENT every trimester. Attempt to submit a PREVIOUS TRIMESTER ASSIGNMENT or A WRONG ASSIGNMENT will get a ZERO (0) mark without any consideration for resubmission.
Requirements
The assignment should cover the contents described bellows.
Assignment Structure and Details of Assignment Tasks
Introduction
Briefly introduction of your group’s work: the purpose of assignment, key findings and structure of the assignment (not more than 300 words)
Part 1. Research and fact finding of Australian financial market
1.1 Comparison of four key financial institutions: commercial banks, insurance companies, investment banks and investment funds in Australia from the perspective of a potential investor who would like to invest into the institutions
Criteria for comparison include: (1) classification (the group of financial institutions it belongs to); (2) market sector of operation; (3) key business activities; and (4) main source of income. Organize your group’s comparison in a relevant table. Your group’s research should be supported by a fact finding of real life examples of a commercial bank, insurance company, and investment bank and investment fund in Australia.

Your group’s discussion on each example should reflect the above mentioned criteria and the following information: (i) what is the code of stock listed, (ii) when was the company’s stock was first listed, (iii) what is the current market capitalization of that stock, (iv) the current total share outstanding, (v) who is the chairman and who is the CEO of that company, (vi) a graph of five year dividend payment for each company and (vii) next dividend date. Using ASX and ASIC websites for the fact finding. Your group is not allowed to choose the cases I have used as examples in this assignment instruction.
• Example: Commonwealth Bank is a commercial bank, which is categorized in the group of Authorized Deposit-taking Institutions (ADIs) in Australia. Commonwealth Bank operates
in banking market sector. Its key business is taking deposit from individuals as well as businesses, and then lend those pooled savings to other individuals and businesses.

Its main source of income is the difference between the interest rates it charges the borrowers and the interest rates it pays the depositors. The code of listed commonwealth bank stock on Australian Stock Exchange is CBA. The stock was first listed on 12/09/1991.

The total outstanding share 1,770,239,507. As of 18 February 2020, CBA market cap is 158.37bn, Ms Catherine Livingstone is the CBA’s Chairman, Non Exec. Director and Mr Matthew Comyn is the Managing Director, CEO, Director. The next dividend payment date is 31 March 2020.
1.2 Analysis of three financial management questions: (i) capital budgeting, (ii) capital structure and (ii) working capital management
Define the three financial management questions and justify your group’s analysis by illustrating examples: Choose one or more events described by media (CNN Business, Financial Times, Dow Jones financial news etc.) about a company who is doing one or more activities related to the three financial management questions. Analyse that event (s) applying the three financial management questions. Note: Each question is to be illustrated by at least one event.
Example of an event in media that reflect one of the three financial management questions:
Commonwealth Bank’s Project Bond-i: Bonds on block chain in collaboration with World Bank: “In August 2018 the World Bank and CommBank successfully launched Bond-i (‘blockchain operated new debt instrument’). It’s the world’s first bond to be created, allocated, transferred and managed through its life cycle using block chain technology”.
Source: https://www.commbank.com.au/business/business-insights/project-bondi.html
Bond-I Project by Commonwealth Bank is an outstanding example of capital budgeting in financial management. This is an investment decision to generate future cash flows for the bank in providing the auxiliary financial service of issuing debt instruments. Using block-chain technology to create, locate, transfer and manage debt instruments undoubtedly enable huge saving of money and enhancing efficiency. However, the security risk may be a big potential problem for this project.
Part 2. Fact Finding of Australian financial market regulation
2.1 Fact finding of the listing on ASX
Assuming your group is working for a company that is considering to be listed on ASX in the near future. Go to the website of Australian Stock Exchange (ASX), do a fact finding and present an analysis of Australian Stock Exchange Listing Requirements and process. The following questions should be addressed:
(1) What are the advantages of being a listed company on ASX?
(2) What are the problems that need to be taken in consideration for being listed company on ASX?
(3) What are the requirements for listing on ASX?
(4) What are the steps of listing procedures on ASX?
(5) How listing fee is applied. Using ASX listing fee calculator to identify your selected company listing fee, choosing any random number for the ranges of market cap: 10 million -50 million; 50 million-100 million; 100 million-500 million.
2.2 Fact Finding of requirements on Financial advisory service registration in Australia
Assuming after graduation you would like to work as a financial adviser. Go to the website of Australian Securities and Investment Commission, do a fact finding and present an analysis of financial advisor registration to identify whether you are qualified and what steps should be taken to be a financial adviser in Australia. The following questions should be addressed:
(1) What is the ASIC’s Financial advisers register?
(2) Who should be on the Register, who are not on the Register and who updates the register?
(3) What information should be on the Register?
(4) What are the relevant financial products for a financial advisor?
(5) What are the professional standards applied for a financial advisor.
Part 3. Risk analysis and project evaluation
Case Study: Assume that are the financial manager of a company, which is considering a potential project with a new product that is expected to sell for an average price of $22 per unit and the company expects it can sell 350 000 unit per year at this price for a period of 4 years. Launching this project will require purchase of a $2 000 000 equipment that has residual value in four years of $200 000 and adding $ 600 000 in working capital which is expected to be fully retrieved at the end of the project. Other information is available below:
Depreciation method: straight line
Variable cost per unit: $11
Cash fixed costs per year $350 000
Discount rate: 10%
Tax Rate: 30%
Do an analysis with cash flows of the project to determine the sensitivity of the project NPV with the following changes in the value drivers and provide your results in (a) relevant tables:
Unit sales decrease by 10%
Price per unit decreases by 10%
Variable cost per unit increases 10%
Cash fixed cost per year increases by 10%
Conclusion
Summarize the outcomes of your group’s works (not more than 300 words)
Presentation: Your group is required to present the assignment outcomes in a video presentation. All members need to participate in the presentation using a PowerPoint slides. The presentation is in no more than 10 minutes. You can record each group member’s presentation and then merge the video records in one big video for your group presentation.
The group video presentation should be uploaded to a web-based hosting platform (e.g. Youtube) and your group is required to submit the link to the video via a separate submission link at Blackboard/Assessments/Group Assignment Presentation and Link for Submission.
Marking criteria
Marking criteria Weighting

  1. Research on Australian financial market
    1.1. Comparison of four key financial institutions 4%
    1.2. Analysis of three financial management questions 4%
  2. Fact Finding of Australian financial market regulation
    2.1. Fact finding of the listing on ASX (1 mark each question) 5%
    2.2. Fact Finding of requirements on Financial advisory service registration (1 mark each question) 5%
  3. Risk analysis and project evaluation
    3.1. Perform a sensitivity analysis with data provided 10%
  4. Academic writing: Presentation, structure and academic writing 2%
    Total weight of written report 30%
  5. Presentation:
    Presentation content 7%
    Presentation skill 3%
    Total weight of presentation 10%
    Total weight of group assignment 40%
    MARKING RUBRIC
    Task Excellent
    (80%-full marks given) Very Good
    (71-79% marks given) Good
    (61-70% marks given) Satisfactory
    (50-60% marks given) Unsatisfactory
    (0-49% marks given)
  6. Research on Australian financial market
    1.1 Comparison of four key financial institutions Clearly identify the distinctive features and differences and alike of four key financial institutions, basing on given criteria or more with exceptional good analysis and
    explanation
    Comparison is presented and analyzed in a, outstanding logical and efficient method;
    Three examples of four key financial institutions are
    provided and
    justified with full information. Efficient analysis and reliable data and sources All features of four key financial institutions are provided with good analysis and explanation basing on the given criteria with good analysis
    Comparison is provided and organized in a
    logical method
    Three examples four key financial institutions are provided and justified with required information and relevant data Features of four key financial institutions are provided with adequate explanation and
    analysis
    Comparison is made relevantly
    Four examples are provided with adequate information and data. Features of four key financial institutions are provided with adequate explanation and
    analysis
    Comparison is made relevantly but may not be
    completed
    Four examples are provided with some information and data. Analysis and comparison of four key financial institutions are not completed or sufficient
    Examples are not provided or provided with limited information and data
    1.2 Analysis of three financial management questions Clearly identify the three
    financial
    management
    questions with exceptional good analysis and explanation
    Events selected from mass media for illustration of
    three financial management questions are exceptionally relevant with outstanding explanation and analysis Clearly identify the three
    financial
    management
    questions with good analysis
    and explanation
    Events selected from mass media for illustration of three financial management questions are very relevant with good explanation and analysis Clearly identify the three
    financial
    management
    questions with proper analysis
    and explanation
    Events selected from mass media for illustration of three financial management questions are relevant with proper explanation and analysis Identify the three financial management
    questions with some analysis
    and explanation
    Events selected from mass media for illustration of three financial management questions are relevant however with some incomplete analysis and explanation Failing to identify the
    three financial management
    questions with a proper analysis
    and explanation
    Events selected from mass media for illustration of three financial management questions are not relevant and without explanation and analysis
  7. Fact Finding of Australian financial market regulation
    2.1. Fact finding
    of the listing on
    ASX
    2.2. Fact Finding of requirements on Financial advisory service registration Efficiently using data and information derived from designated source to provide an excellent fact finding and analysis to address all the questions. Analysis is justified and presented in an efficient, analytical and logical manner. Using relevant data and information derived from designated source to provide a good fact finding and analysis to address the questions. Analysis is justified and presented in a proper and logical manner. Data and information derived from designated source to provide a proper fact finding and analysis to address the questions. Using limited data and information derived from designated source to provide a fact finding and analysis to address the questions. No or inadequate using of secondary data and information for fact finding. Incomplete analysis.
  8. Risk analysis and project evaluation
    Perform a Presenting a Presenting a Presenting a Presenting a No or incorrect sensitivity correct and well-correct and correct correct sensitivity analysis with presented well-presented sensitivity sensitivity analysis.
    data provided sensitivity sensitivity analysis with analysis with analysis with analysis with proper analysis proper analysis proper analysis proper analysis and justification. and
    and justification; and justification. justification.
    However, there
    Analysis is taken may be some with exceptional incorrect good justification calculation, and presentation limited analysis
    of data and and calculation. explanation.
  9. Academic writing
    4.1 Presentation, structure and academic writing Demonstrated a high level of understanding and skills of academic writing by means of
    criticism, logical argument, and interpretation of data and information. Very rational demonstration
    of the ability to present the ideas in proper analytical and contextual level. Demonstrating the ability to present the ideas in proper analytical and contextual level. Demonstrating limited skills of academic writing in terms of structure, presentation, wordings and referencing. No relevant justification using data and information derived from the analysis of financial statements;
    Failing to meet the requirements of academic writing in terms of structure, presentation, wordings and referencing.
  10. Presentation
    5.1 Presentation content Exceptionally well summarised and presented excellent answers for the group assignment questions Very well summarized and presented good answers for the group assignment questions Adequately summarized and presented correct answers for the group assignment question Basically presented correct answers for the group assignment. Errors might present but minor Insufficiently presented or incorrectly presented answers for group assignment questions
    5.2 Presentation
    skill The presentation is cohesive& highly professionally presented The presentation is mostly cohesive & professionally presented The presentation is somewhat cohesive &professionally presented The presentation is cohesive & professionally presented at times The presentation is not cohesive nor professionally presented

Faculty of Higher Education
Assignment Cover Sheet
Unit Code
Unit Name
Your Campus and Interactive Tutorial Group Number
Your Lecturer
Is this a Group or Individual
assignment
If Group, state your group number _
Due Date
Declaration
Complete this and attach as a front cover sheet to your Blackboard submission
We certify that:

  1. This assignment is our own work. We have acknowledged and disclosed any assistance received in its preparation and cited all sources from which data, ideas, words (whether quoted directly or paraphrased) were taken.
  2. This assignment was prepared specifically for this unit only.
  3. The reference list is truthful and accurate and in Harvard referencing style.
    Student name/s Student number [must be correct] Which section(s) did each person work on

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