Evaluate and recommend which Game Console the company should proceed with, using the Net Present Value technique. Discuss how rapid technological change could impact the assumptions. You should include a discussion of possible impact of post supply chain disruptions post covid.

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Corporate Financial Management

Assignment description:

Case 1: An Irish company, Leprechaun, that sells imported game consoles online is evaluating two mutually exclusive new products, only one of which will be accepted. The company’s cost of capital is 11%.

Option 1: Game Console X
This project to launch Game Console X will have a five-year life. Leprechaun thinks that the market for this console will become too competitive due to improvements in visual techniques after five years, so it will stop selling this product and launch new products after that. Selling price per unit in the first year is expected to be Euro 14.55. Materials and shipping costs are expected to be Euro 3.30 and Euro 7.20 per unit respectively in the first year. The selling price and the cost of shipping per unit are expected to increase by 6% per year in the third and subsequent years. Materials cost
per unit is expected to increase by 5% per year in the third and subsequent years. 80,000 units are expected to be produced and sold in the first year; in the second and subsequent years this figure is expected to increase to 110,000 units. Investment in working capital is expected to increase by Euro 135,000 at the start of the project and will be reversed at the end of the project life. Initial cost of Euro 1,425,000 is to be paid now. Assets used in the project will have a useful life of five years, after which they will be sold on for a value of Euro 75,000. The company will apportion per year Euro 30,000 of its head office administrative costs to this project.

Option 2: Game Console Y
This project to launch Game Console Y will have a three-year life. The company has already spent Euro 80,000 on the design of this product. An initial outlay of Euro 1,275,000 is to be paid now with a further Euro 300,000 in one year’s time. The annual revenue is expected to be Euro 1,110,000 in year 1 rising by Euro 135,000 each subsequent year. Operational costs are expected to be Euro 450,000 in year 1 rising by Euro 112,500 each subsequent year. At the end of the project, assets will be sold for a value of Euro 375,000. Investment in working capital is expected to increase by Euro 60,000 at the start of the project and will be reversed at the end of the project life. The company will apportion per year Euro 50,000 of its head office administrative costs to this project.
With regard to the development of Console Y, some management will have to leave aside work on other projects, resulting in delays and reduced income from these projects amounting to Euro 75,000 per year. Originally when designing the two Consoles, Leprechaun has talked to factories in East Europe for the production of both X and Y in 2022. Leprechaun is to launch either Game Console X or Y in summer 2025.

Requirement:
You are the Chief Financial Officer of Leprechaun. You are required to present a report to the board of directors and management team of Leprechaun, addressing the following:
a). Evaluate and recommend which Game Console the company should proceed with, using the Net Present Value technique. Word limit: 300 words. (30%)
b). Discuss how rapid technological change could impact the assumptions. Word limit: 150 words.
c). You should include a discussion of possible impact of post supply chain disruptions post covid. Word limit: 150 words. (30%)

Case 2: Discuss the application of investment appraisal techniques using discounted cash flows methods, its advantages and drawbacks using a worked example with a discount rate of 5%. Word limit: 1,000 words. (40%)

Assignment guidance:
• Submit two separate reports for the two cases. Case 2 report will be submitted through a Turnitin link on Blackboard Learn, and a similarity report will be generated on each submission.
• Marks are awarded for content, quality of discussion and effective use of referencing. To achieve high marks, students will be expected to demonstrate a familiarity with the wider literature in the subject area, and not merely an ability to re-produce the lecture notes. Higher marks will also be awarded to students who provide strong evidence of analysis and critical evaluation of the various concepts and techniques identified and their application to real world situations.

Post your response as an initial post. Include URL to the article being reviewed. Identify the concept referenced in the article. Explain how the concepts in the chapters for this unit are applied in the article.

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FI360 Current Article

Directions
Reflecting on the topics we have covered in this course, complete the following posts by examining the following questions:

Initial Post
Post your response as an initial post.
Include URL to the article being reviewed.
Identify the concept referenced in the article.
Explain how the concepts in the chapters for this unit are applied in the article.

Special Note: Be sure to focus on the CHAPTER objectives for each week as opposed to the Course Learning Outcomes.

All postings should contain appropriate grammar, correct spelling, appropriate citing, and be relevant to the discussion topic. Each initial response should be 100-150 words

Evaluate and recommend which Game Console the company should proceed with, using the Net Present Value technique. Discuss how rapid technological change could impact the assumptions. You should include a discussion of possible impact of post supply chain disruptions post covid.

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Corporate Financial Management

Assignment description:

Case 1: An Irish company, Leprechaun, that sells imported game consoles online is evaluating two mutually exclusive new products, only one of which will be accepted. The company’s cost of capital is 11%.

Option 1: Game Console X
This project to launch Game Console X will have a five-year life. Leprechaun thinks that the market for this console will become too competitive due to improvements in visual techniques after five years, so it will stop selling this product and launch new products after that. Selling price per unit in the first year is expected to be Euro 14.55. Materials and shipping costs are expected to be Euro 3.30 and Euro 7.20 per unit respectively in the first year. The selling price and the cost of shipping per unit are expected to increase by 6% per year in the third and subsequent years. Materials cost
per unit is expected to increase by 5% per year in the third and subsequent years. 80,000 units are expected to be produced and sold in the first year; in the second and subsequent years this figure is expected to increase to 110,000 units. Investment in working capital is expected to increase by Euro 135,000 at the start of the project and will be reversed at the end of the project life. Initial cost of Euro 1,425,000 is to be paid now. Assets used in the project will have a useful life of five years, after which they will be sold on for a value of Euro 75,000. The company will apportion per year Euro 30,000 of its head office administrative costs to this project.

Option 2: Game Console Y
This project to launch Game Console Y will have a three-year life. The company has already spent Euro 80,000 on the design of this product. An initial outlay of Euro 1,275,000 is to be paid now with a further Euro 300,000 in one year’s time. The annual revenue is expected to be Euro 1,110,000 in year 1 rising by Euro 135,000 each subsequent year. Operational costs are expected to be Euro 450,000 in year 1 rising by Euro 112,500 each subsequent year. At the end of the project, assets will be sold for a value of Euro 375,000. Investment in working capital is expected to increase by Euro 60,000 at the start of the project and will be reversed at the end of the project life. The company will apportion per year Euro 50,000 of its head office administrative costs to this project.
With regard to the development of Console Y, some management will have to leave aside work on other projects, resulting in delays and reduced income from these projects amounting to Euro 75,000 per year. Originally when designing the two Consoles, Leprechaun has talked to factories in East Europe for the production of both X and Y in 2022. Leprechaun is to launch either Game Console X or Y in summer 2025.

Requirement:
You are the Chief Financial Officer of Leprechaun. You are required to present a report to the board of directors and management team of Leprechaun, addressing the following:
a). Evaluate and recommend which Game Console the company should proceed with, using the Net Present Value technique. Word limit: 300 words. (30%)
b). Discuss how rapid technological change could impact the assumptions. Word limit: 150 words.
c). You should include a discussion of possible impact of post supply chain disruptions post covid. Word limit: 150 words. (30%)

Case 2: Discuss the application of investment appraisal techniques using discounted cash flows methods, its advantages and drawbacks using a worked example with a discount rate of 5%. Word limit: 1,000 words. (40%)

Assignment guidance:
• Submit two separate reports for the two cases. Case 2 report will be submitted through a Turnitin link on Blackboard Learn, and a similarity report will be generated on each submission.
• Marks are awarded for content, quality of discussion and effective use of referencing. To achieve high marks, students will be expected to demonstrate a familiarity with the wider literature in the subject area, and not merely an ability to re-produce the lecture notes. Higher marks will also be awarded to students who provide strong evidence of analysis and critical evaluation of the various concepts and techniques identified and their application to real world situations.

Provide a critical discussion on interest sensitive gap management when used as interest risk management tool in banks. Provide a critical discussion of relevant academic articles on the effectiveness of the Basel III framework, in particular, the use of countercyclical buffer.

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ABC Bank report

The assignment is a report requested by the senior management at ABC Bank. As ABC Bank’s risk trainee, you have been asked to prepare a report on the bank’s ability to meet the , which will be submitted to the bank’s senior risk analyst.

1. The cover page should contain a title, the total word count and an Executive Summary describing your key findings. (5 marks)

2. You are given the latest trading book of ABC Bank (in the Excel Data file for the Referral/Deferral Final Report). In the list of items, two stocks were added to the portfolio just now and they are currently the least liquid items in the trading book of the Bank. You are required to quantify the implication of the purchase on reserve requirements and the trading costs incurred. Comment on the implication of the new purchase under current liquidity risk requirement.

3. Provide a critical discussion on interest sensitive gap management when used as interest risk management tool in banks. Comment on its effectiveness and implication on leverage requirement.

4. ABC Bank’s regulators require that the bank use multiple risk mitigating approaches for the upcoming stress testing. Critically discuss the credit risk management approaches used by banks. Comment on the strengths and weaknesses of each approach.

5. Provide a critical discussion of relevant academic articles on the effectiveness of the Basel III framework, in particular, the use of countercyclical buffer. Cover at least 3 academic articles on the topic (at least 1 of which should be from within the last three years).

6. List of references is required. You should provide the details of any the material that was cited in the report. Citation in text and reference list should follow Westminster Harvard Referencing Style

Describe and critically evaluate the overall relationship between the chosen topics of study. Critically assess the political nature and socio-economic influence of financial information. Explain and evaluate recent developments in understanding the pathology of corporate failure. Assessment of the different types of risk and the management of these including hedging and other exposure minimising techniques.

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Appropriate financial theories into the capital structure (MM theories)

Aim
The aim of this assignment question is essentially one of investigation and analysis. The assignment question seeks to facilitate an application of contemporary financial management theory/issues within an empirical perspective.

Important information:

i) This assignment contributes 50% of the module assessment.

ii) This assignment will primarily address the following learning outcomes:
Describe and critically evaluate the overall relationship between the chosen topics of study(L02)
Critically assess the political nature and socio–economic influence of financial information(L05)
Explain and evaluate recent developments in understanding the pathology of corporate failure(L06)
Assessment of the different types of risk and the management of these including hedging and other exposure minimising techniques(L08)

iii) Word limit: maximum 2,500 words (excluding appendices and references).

 

Coursework topic: Capital Structure
Instructions;
1. Select a company listed on the Hong Kong Stock Exchange
2. You must use the most recent published reports and accounts. Good answers will probably make use of further accounts and stock market data.

Requirements / Questions
1. Describe the capital structure of the company and how this differs from financial structure. Explain whether capital structure has changed over time. [20 marks]
2. Making reference to appropriate financial theories explain whether you [40 marks]
3. Discuss the possible costs, risks and benefits of company changing its capital structure. [40 marks]

Note:
The marks awarded for the assignment are:
Assessment Criteria:
a: description of capital structure
b: critical evaluation/review
c: academic support given to evaluation/review
d: conclusion based on evaluation/review
e: presentation and structure

What did the balance sheet look like in the quarter just prior to issuing the bonds? At what price and yield-to-maturity (YTM) was the initial offering sold? If you were one of the original investors in this issue and you had invested $10,000, what would your total return be if you sold the securities at today’s market price?

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Financial data for analysis

Students should select a company that has issued bonds in the last 3 years so that the information sources can provide sufficient financial data for analysis. Students should familiarize themselves with bonds and preferred stock as an investment opportunity and as a source of funds. In this assignment, students will determine why a fixed-income security may be offered by a firm, what features it must have in order to be attractive to investors, and what kind of financial results were achieved. Balance sheet accounts as well as certain ratios are to be analyzed.

The paper should include a cover page, table of contents, introduction, body of the report (Sections 1-5), conclusion, and works cited. Only the introduction, body, and conclusion count towards the page count. Graphs, tables, and appendices should be added when needed, however, these items are not part of the total page count.
Even though this is not a scientific-type writing assignment and is mostly creative in nature, references are still very important. At least three authoritative, outside references are required (anonymous authors or web pages are not acceptable). These should be listed on the last page titled “Works Cited.”

Introduction: (25 points) Cnstruct a comprehensive introduction that lays out your project.

Section 1: Company Background: (25 points) This section should include what industry the firm is in, its products, its competitors, and the stated main reason for needing capital (to fund receivables, capacity expansion, retire older debt, etc.). If you can’t find a specific discussion about this, then use your judgment as to why you think the funds were needed and explain your reasoning.

Section 2: Balance Sheets: (25 points) What did the balance sheet look like in the quarter just prior to issuing the bonds? Include both a copy from before the issue and after the issue in an appendix to your paper. From the “Key Financial Ratios” link contained in the Week 2 Lesson, calculate Return on Equity (ROE), one debt ratio, and at least one other ratio of your choice both before and after the bonds were issued, and discuss what the results indicate and why you think they are important to your report.

Section 3: Trends in YTM and Price: (25 points) At what price and yield-to-maturity (YTM) was the initial offering sold? Tabulate the price and YTM of the issue at the end of each calendar quarter for the last six quarters. Then, plot the tabulated values to visualize the trends in YTM and prices. Add a brief discussion about your graph or chart and what the results indicate.

Section 4: Rate of Return: (25 points) If you were one of the original investors in this issue and you had invested $10,000, what would your total return be if you sold the securities at today’s market price? Compute the current duration of the bond and add a brief discussion about your calculations and what the results indicate.

Section 5: WACC: (25 points) Compute the firm’s current Weighted Average Cost of Capital (WACC) assuming the total debt of the firm is in the issue that you analyzed. This means that if the company has more than one debt issue outstanding with a total face value of $X million and your chosen issue involves $Y million, then assume that all $X million is in your issue. This will simplify the calculations without diminishing learning value. Add a brief discussion about your calculations and what the results indicate.

Conclusion: (25 points) Based on your research in Sections 1-5, discuss at least three overall conclusions about this offering. In your conclusion, please recap your analysis so that a reader can draw upon your expertise in order to make an educated investment decision. The conclusion should draw together all that you have researched and analyzed and provide a well-supported investment recommendation.

Overall: Organize your project with a title page, table of contents, and Works Cited page. Clearly label each section and ensure pages are numbered. Show all calculations. If calculations involve more than one or two lines, put them in an appendix and show only the end results in the main paper. Sections should flow smoothly from one to another to ensure continuity. Please edit your report for grammar and spelling, so that it is something of which you can be proud.

Clearly “describe” and “explain” as required in the question. Apply the MM theory and explain carefully calculations you make. Discuss how the company’s capital structure affects the company share price movements. Compare and analyse the company’s debt ratio with industry or other competitors.

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Capital structure

Structure of Assignment (1)
• Introduction
• Literature review

• Q1
— Company’s background.
— Clearly “describe” and “explain” as required in the question.
— A graph of showing changes in the firm’s capital structure (over last 5 years) may be useful.

• Q2
— Apply the MM theory and explain carefully calculations you make.
— Discuss how the company’s capital structure affects the company share price movements.
— Compare and analyse the company’s debt ratio with industry or other competitors.

• Q3
— Discuss possible changes that could be made in the firm’s capital structure.
— Focus on possible costs and risks such as agency costs, risk of bankruptcy, risk of incorrect signal etc. in the context of trade off theory and Pecking order theory
— It would be better to put your discussions in a wide context such as industry or other competitors

Describe the primary sources of revenues that the States rely on, noting if they are progressive, regressive or proportional (explaining each).  How has each source been impacted by the current crisis, and what should policy makers do to address the shortfall in receipts that is likely to occur in the upcoming fiscal years?   How does the provision below that was included in the American Recovery Plan impact these choices? 

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Summer 2022  ECO 356

Summary: Every semester when I start this class, my goal is to teach each of my students how the theory that is presented in the textbook operates in the real world of fiscal policy.  My hope is that you will have a better understanding of how and why you should stay informed, and most importantly engaged in the process that involves how your Federal, state, and local government spend your money each day. Understanding the context of how these fiscal decisions are made helps you become better informed taxpayers and citizens.

How the Federal, states and localities have responded to the events of the past two years & will continue to respond should be based on some historical context.  It should also be based on the theories we have been discussing throughout this course.  This final project is intended for you to show me that you have gained the knowledge necessary to analyze what government at all levels has done for you as taxpayers, and what they should focus on in years to come.

Instructions:  You should answer 5 out of the following 10 questions, each will be worth 20 points.  You may use your notes, slides, and any additional sources available to support your answer.  I will be looking for you to demonstrate that you understand these issues, the fundamentals or policy behind each, how they will shape what we can anticipate from policy makers, and/or what you believe should be done.   The links included in the questions are intended to be a guide.  Feel free to find other sources to support your answer.  Include your sources as a link, formal citation is not necessary for your additional sources, but you should include links to the articles.

Save this document and answer directly following the question. Final exams should be returned to me via Blackboard by Saturday July 2 at 1159 pm.  

(1)  TAX = EXP.  From day one of this class, we discussed how the study of State and Local finance is inherently different from the issues addressed by Federal Government in their respective budgets.    The first article below is a great example of the fiscal choices that State/Local governments make.  How States and localities will manage through this crisis is dependent upon their prior fiscal choices.  What are the differences between what the Federal government can do, and what the states and localities can do?  What are the implications? You should discuss why these differences matter.

https://www.pewtrusts.org/en/research-and-analysis/articles/2020/04/24/states-take-early-steps-to-manage-covid-19-budget-fallout?utm_campaign=2020-04-29+Rundown&utm_medium=email&utm_source=PewT

The recent American Recovery Plan addressed some of the above issues, as seen in the article below – what remains to be done from your perspective?  Provide examples and your justification or support.

https://taxfoundation.org/american-rescue-plan-covid-relief/#:~:text=The%20American%20Rescue%20Plan%20contains,in%202020%20from%20income%20taxes.&text=It%20only%20applies%20to%20individuals,federal%20revenue%20by%20%2424.9%20billion.

(2) Richard Musgrave’s 3-part definition of the “role” of government provides us with the rationalization for many of the policies enacted by Federal, State, and Local governments.  Please describe each and provide an example of how a government program (or policy) enacted to date to address the COVID crisis help accomplish each of the three roles.   You should have a recent example for each role.

https://www.usa.gov/coronavirus

https://www.gao.gov/coronavirus

(3)  The United States recently participated in the democratic tradition that stretches back to the founding of the republic: the once-a-decade census of its population.  From 1790 (U.S. population: 3.9 million) to 2010 (U.S. population: 309 million), the decennial census has changed alongside the nation itself. From the territory it covers, to the questions it asks, to how it collects the information, the census has reflected evolution in technology, the role of the federal government, and the size of the country itself.    The stakes are high for States, local governments, and regions across the country, which depend on a full and accurate count of their populations to ensure their fiscal health and political strength.   How has the current crisis impact this vital account of the US population?  What are areas of fiscal health that the States and local governments should be concerned about?   What will be some of the challenges?

https://www.census.gov/newsroom/press-releases/2021/2020-census-apportionment-results.html

https://2020census.gov/content/dam/2020census/materials/partners/2020-01/Uses-of-Census-Bureau-Data-in-Federal-Funds-Distribution.pdf

(4) As we discussed in class, grants from the Federal government are generally provided through three different types.  Please describe the four elements that support grant policy and the three types of grants that the Federal government utilizes.  The article below discusses some of the outstanding issues relating to the need for additional funds from the Federal governments for the states and localities, as well as a second article which describes the most recent package signed by President Biden last month.   Based on your knowledge of why grants exist, and how they are calculated, how would you alter some of the formulas being used to distribute aid?  What recommendations should policy makers consider ensuring that the States that have been hardest hit by the crisis are compensated?  Alternatively, if you believe it is not up to the Federal government to support these states with additional relief, defend your position and offer alternatives for revenues that the State should consider.

https://www.cbpp.org/research/state-budget-and-tax/states-need-significantly-more-fiscal-relief-to-slow-the-emerging-deep

https://taxfoundation.org/biden-stimulus-american-rescue-plan/

(5)  Fiscal choices determine the mix of revenues that a State relies on to fund their budget on an annual basis.  Describe the primary sources of revenues that the States rely on, noting if they are progressive, regressive or proportional (explaining each).  How has each source been impacted by the current crisis, and what should policy makers do to address the shortfall in receipts that is likely to occur in the upcoming fiscal years?   How does the provision below that was included in the American Recovery Plan impact these choices? 

https://taxfoundation.org/arpa-state-tax-cuts-limitation/

(6) When looking at the amount and proportion of state/local dollars that are spent annually on education, it is easy to see why there is a concern regarding the question of declining performance – that is, why, despite the investment by States/localities, scores for exams such as the SAT’s have remained constant over the last several years.  Describe the relationship between inputs and outputs or outcomes in the production of education.  What are at least two things that you believe are measured currently in your local district.  In thinking about the impact of the corona virus on lower education across the country, how do you think these validation measures could/should change?  In your answer, you should address the Lindahl theory of benefit taxation – ie. What are you willing to pay for through a property tax?

https://www.brookings.edu/blog/brown-center-chalkboard/2021/03/12/coronavirus-and-schools-reflections-on-education-one-year-into-the-pandemic/

https://learningpolicyinstitute.org/blog/covid-analysis-american-rescue-plan-act-2021

(7)  New York State recently enacted its State fiscal year budget for 2022-23.   It was based on several assumptions and included several provisions relating to borrowing by the State to provide a source of funds for in the upcoming fiscal year.  The article below describes most of the debt related provisions included in the last year’s budget. What are the three primary reasons that State and local governments borrow?  What are the two types of debt which is utilized?  What is the difference in growth rate between the two?  Using the article below and other sources give me an example of each type of debt, and why the issuance of debt is supportable for this purpose.   Do you agree with further increasing our debt burden?  Support your position.   Alternatively, if you do not agree with these choices, defend your position, and offer alternatives for revenues that the State should consider.

https://www.empirecenter.org/publications/new-yorks-proposed-state-budget-calls-for-a-huge-debt-hike/

 

(8) Provide an overview of the role of the Federal Government in Transportation Financing (as it relates to State & Local Governments).    What funding streams are used to finance these projects?  What is the basis for the difference in level of funding between transportation modes (highways, mass transit, rail, air & water)?  Identify the rationale behind the Federal government’s level of involvement historically. What are the current transportation issues facing New Yorkers (specifically those downstate in the NYC metropolitan region)? How will the current economic crisis affect these revenues? What additional issues do you foresee in the future?

https://www.usatoday.com/story/news/politics/2020/05/04/coronavirus-transportation-officials-urge-federal-aid-roads-bridges/3005467001/

 

https://thehill.com/blogs/congress-blog/politics/495998-additional-federal-funding-for-new-yorks-transportation-system

https://www.citylab.com/transportation/2020/04/coronavirus-cases-new-york-subway-infection-riders-mta/610159/

 

http://www.trb.org/Main/Blurbs/180480.aspx

 

https://www.rtands.com/passenger/new-york-state-comptroller-says-mta-debt-levels-threaten-capital-program/

 

(9) Economic Development is a significant programmatic area in the States, as they (i.e. the States) compete against each other to attract new businesses and the accompanying jobs in a specific state.  In addition to comparison of tax rates, there are essentially two types of incentives offered by the states – please define and explain the primary differences between the two approaches.  Your answer should include two examples of each.  Which approach do you believe is most effective why?  In light of the current crisis, what would you change or recommend as an alternative economic development program?

 

https://www.newsweek.com/why-us-economy-may-never-same-again-after-coronavirusanalysis-1501830

(10)  The COVID-19 crisis has impacted certain individuals and family units more than others.  The strain on the traditional safety net programs can be seen from an analysis of the preliminary data.

https://www.cbpp.org/research/poverty-and-inequality/tracking-the-covid-19-recessions-effects-on-food-housing-and

https://www.brookings.edu/blog/the-avenue/2020/04/30/american-workers-safety-net-is-broken-the-covid-19-crisis-is-a-chance-to-fix-it/

Using the three roles of R. Musgrave, what would you recommend to the both the Federal & State government amend, expand or enact to correct for these inequities?  For each of the three roles, you should develop a proposal (supported by data) which you support and justify.

Evaluate and recommend which Game Console the company should proceed with, using the Net Present Value technique. Discuss how rapid technological change could impact the assumptions. You should include a discussion of possible impact of post supply chain disruptions post covid.

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Corporate Financial Management

Assignment description:

Case 1: An Irish company, Leprechaun, that sells imported game consoles online is evaluating two mutually exclusive new products, only one of which will be accepted. The company’s cost of capital is 11%.

Option 1: Game Console X
This project to launch Game Console X will have a five-year life. Leprechaun thinks that the market for this console will become too competitive due to improvements in visual techniques after five years, so it will stop selling this product and launch new products after that. Selling price per unit in the first year is expected to be Euro 14.55. Materials and shipping costs are expected to be Euro 3.30 and Euro 7.20 per unit respectively in the first year. The selling price and the cost of shipping per unit are expected to increase by 6% per year in the third and subsequent years. Materials cost
per unit is expected to increase by 5% per year in the third and subsequent years. 80,000 units are expected to be produced and sold in the first year; in the second and subsequent years this figure is expected to increase to 110,000 units. Investment in working capital is expected to increase by Euro 135,000 at the start of the project and will be reversed at the end of the project life. Initial cost of Euro 1,425,000 is to be paid now. Assets used in the project will have a useful life of five years, after which they will be sold on for a value of Euro 75,000. The company will apportion per year Euro 30,000 of its head office administrative costs to this project.

Option 2: Game Console Y
This project to launch Game Console Y will have a three-year life. The company has already spent Euro 80,000 on the design of this product. An initial outlay of Euro 1,275,000 is to be paid now with a further Euro 300,000 in one year’s time. The annual revenue is expected to be Euro 1,110,000 in year 1 rising by Euro 135,000 each subsequent year. Operational costs are expected to be Euro 450,000 in year 1 rising by Euro 112,500 each subsequent year. At the end of the project, assets will be sold for a value of Euro 375,000. Investment in working capital is expected to increase by Euro 60,000 at the start of the project and will be reversed at the end of the project life. The company will apportion per year Euro 50,000 of its head office administrative costs to this project.
With regard to the development of Console Y, some management will have to leave aside work on other projects, resulting in delays and reduced income from these projects amounting to Euro 75,000 per year. Originally when designing the two Consoles, Leprechaun has talked to factories in East Europe for the production of both X and Y in 2022. Leprechaun is to launch either Game Console X or Y in summer 2025.

Requirement:
You are the Chief Financial Officer of Leprechaun. You are required to present a report to the board of directors and management team of Leprechaun, addressing the following:
a). Evaluate and recommend which Game Console the company should proceed with, using the Net Present Value technique. Word limit: 300 words. (30%)
b). Discuss how rapid technological change could impact the assumptions. Word limit: 150 words.
c). You should include a discussion of possible impact of post supply chain disruptions post covid. Word limit: 150 words. (30%)

Case 2: Discuss the application of investment appraisal techniques using discounted cash flows methods, its advantages and drawbacks using a worked example with a discount rate of 5%. Word limit: 1,000 words. (40%)

Assignment guidance:
• Submit two separate reports for the two cases. Case 2 report will be submitted through a Turnitin link on Blackboard Learn, and a similarity report will be generated on each submission.
• Marks are awarded for content, quality of discussion and effective use of referencing. To achieve high marks, students will be expected to demonstrate a familiarity with the wider literature in the subject area, and not merely an ability to re-produce the lecture notes. Higher marks will also be awarded to students who provide strong evidence of analysis and critical evaluation of the various concepts and techniques identified and their application to real world situations.

Response in their own words, using finance terminology, reflecting on specifically what they learned from the assignment and how they think they could apply what they learned in the workplace or in everyday life

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FINC 5

As an initial response to the discussion topic, create a Power Point presentation of 7-8 slides plus the title slide that contains the main results of the Investment News Article Analysis Paper. Your initial response must also include the link to the article you were analyzing, so the other students can review the article and respond to your comments.
You need to respond to other students Power Point presentations. In your responses to other students do not repeat the information presented on the student’s slides. Present your opinion, with supporting rationale, about the other student’s analysis of the investment news article.

Reflection – the students also should include a paragraph in the initial response in their own words, using finance terminology, reflecting on specifically what they learned from the assignment and how they think they could apply what they learned in the workplace or in everyday life