UNIVERSITY OF SUNDERLAND

LEVEL 4
MODULE: Finance and Financial Decision Making for Managers
ASSIGNMENT CODE: MGT104
Submission Date: 2pm on 12th May 2025

Assessment weight: 100% of module

Outcomes Assessed: All module learning outcomes, knowledge and skills, are
assessed in this assignment.

Assignment requirements

This assessment is in three parts, please answer all elements.

Part A carries a weighting of 45% and students should write 1,000 words (+ or – 20%).
Note: trial balance, financial statement of performance and financial statement of position can go in
the appendix and does not count toward word count.

Part B carries a weighting of 30% and students should write 1,000 words (+ or – 20%).
Note: calculations can go in the appendix and do not count toward word count.
Note: Appendix A comes from the MGT104 Module Handbook p.3&4 (available on module canvas
site).

Part C carries a weighting of 25% and students should write 500 words (+ or – 20%).
Note: calculations can go in the appendix and do not count toward word count.

As the weightings for the tasks are not identical this should be considered in word allocation.

Submission.

The submission date for all parts of the assessment is 2pm on 12th May 2025. Students are required to
submit electronic versions to Turnitin.

Please write your Tutor’s name clearly on the front of the assignment.

Please note that this is an individual assignment and the policy of the University on “Policy on
Cheating, Collusion and Plagiarism” applies.

Please note that ‘Late Work Penalties’ apply for this piece of work.

Notes and Guidance

To obtain a high mark, you should

a) Putting calculations into your appendix will not count towards your word count.
b) Incorporate your knowledge and understanding of money, banking and finance issues into
your answer.
1
 c) Demonstrate critical understanding of banking and finance issues.
d) Show evidence of key text and background reading.
e) Synthesise information in a coherent and useful way.

A Harvard standard referencing is required for this assignment.

For further guidance, please see page 9.

2
Part A.
Section 1

Scott Ridley is a sole trader who started trading on 1st January 2024. As a trainee financial manager,
you have been presented with a summary of transactions that occurred during the first year of trading.

Transaction Details
Scott (the owner) introduced £1,000,000 of equity, which was paid into a bank account
1 opened in the name of the business.
Premises were rented from 1/1/2024 at an annual rental of £80,000. During the year, rent of
2 £120,000 was paid to the owner of the premises.
Equipment was bought on 2/1/2024 for £485,000. This is expected to be used in the business
3 for five years and then to be sold for £50,000. (use straight-line depreciation).
4 Bought inventories costing £40,000 on credit
5 Inventories totaling £130,000 was bought using cash
6 Sales revenue on credit totaled £75,000 (cost of sales £52,000)
Rates (a tax on business premises) were paid during the year as follows: for period 1/1/2024 to
7 31/3/2024 - £1,000; for the period 1/4/2024 to 31/3/2025 - £5,000
8 Scott withdrew £60,000 in cash for personal use.
Wages totaling £130,000 were incurred (wage expense) during the year. At the end of the
9 year, the business owed £3,000 for the last week of the year
10 Cash sales revenue totaled £175,000 (cost of sales £100,000)
11 Receipts from trade receivables totaled £56,000
12 Payments of trade payables totaled £35,000
The electricity bill for the final quarter was not received before the accounts were prepared.
The business estimated the electricity expense would be £17,500 for the final quarter,
resulting in a total estimated electricity expense for the year of £70,000, which was paid in
cash. Just before the accounts were finalised, the electricity bill for the final quarter was
received for an amount of £19,350. The supplier will allow Scott to pay the balance when the
13 next quarterly payment is due.

The business uses the straight-line method for depreciating non-current assets.
Required:

i. Record the transactions using double-entry bookkeeping* and prepare a trial balance.
Note (*double entry (t-accounts) workings do not need to be submitted with your assignment.)
(15 marks)

ii. Prepare an statement of performance and a statement of financial position for the year end.
(10 marks)

Section 2

“Financial statements are a vital communication tool for key stakeholders”. Discuss this statement
considering the role of financial record keeping in the survival and growth of small businesses.
(20 marks)

3
Part B

Section 1

The university wants to explore whether to offer a new one-year medical short-course to complement
its existing suite of medical and pharmacy courses.

The course would start in August 2025 and run for 12 months. Employers, such as the Local
Authorities, would sponsor students to undertake the course so they would pay the fees. Market
research and conversations with possible employers has shown that a fee above £4,000 would be
unlikely to attract many students. A fee of £3,500 would be ideal but employers may be willing to pay
£4,000.

Estimated fixed costs are £150,000. These include lecture staff, the hire of the building, standard
advertising costs, electricity, IT equipment and the use of an ambulance. A list of the variable costs is
below:

Variable costs £ (per student)

Mannequin 120
Resuscitator 250
Uniform 60
Membership 150
E-book licences 150
Work experience with NHS 320

Required
i. Assuming the fee is £3,500, what is the number of students required for the course to break-
even (That is, the point at which there is neither a profit nor loss)?
(2 marks)

ii. Assuming the fee is £4,000, what is the number of students required for the course to break-
even?
(2 marks)

iii. How many students must enrol to earn £50,000 target profit? (assume a fee of £3,500)
(2 marks)

iv. What profit would result if 100 students enrolled at a fee of £3,500 per student.
(2 marks)

v. If the university wants to earn a £50,000 profit, and student enrolments are 70, which price
should it charge for the course?
(2 marks)

4
Section 2

The module included a group formative assessment where you were a member of the management
team of a new start-up business introducing a product to the market with the objective of increasing
stakeholder value.

Using appendix A, please reflect and explain how this module has helped you:

• Improve your knowledge of the importance of finance for business longevity and growth.

• Understand the role of the financial manager regarding costing; pricing; the investment
decision and keeping accurate financial records.

• Develop your employability skills.

(20 marks)

5
Part C

Section 1

Sunderland film studios is considering a major investment project. The initial outlay of £-750,000 will,
in subsequent years, be followed by positive cash flows, as shown below. (These occur on anniversary
dates.)

Year 1 2 3 4 5 6
Cash
flows 130,000 290,000 350,000 350,000 240,000 150,000

After the end of the sixth year, this business activity will cease, and no more cash flows will be
produced.

The initial £-750,000 investment in plant and machinery is to be depreciated over the six-year life of
the project using the straight-line method. These assets will have no value after Year 6.

The management estimate that the cash inflows shown above are also an accurate estimation of the
profit before depreciation for each of the years. They also believe that the appropriate discount rate to
use for the firm’s projects is 15 per cent per annum.

The board of directors are used to evaluating project proposals on the basis of a payback rule which
requires that all investments achieve payback in five years.

As the newly appointed executive responsible for project appraisal you have been asked to assess this
project using a number of different methods. Do this in the following sequence

i. Calculate the payback period.

(3 marks)
ii. Calculate an accounting rate of return
(4 marks)
iii. Calculate the internal rate of return
(4 marks)
iv. Calculate the net present value
(4 marks)

Section 2

i. What do you understand by the term ‘opportunity cost’ and why it is important in business
decisions?

(10 marks)

6
Appendix A

Module Learning Outcomes

By the end of this module successful students will be able to do the following:

1. Evaluate a wide range of information to make informed judgements on the costing, pricing and investment
decisions and how to communicate business performance to key stakeholders.
2. Articulate financial risks applicable to a range of business structures and analyse how financial managers
manage these risks to maintain competitive advantage.
3. Identify and apply appropriate financial models and concepts to a range of decision-making scenarios.

The module syllabus includes the following main topics:

The learning outcomes will be developed within the module through an exploration of the role of the financial
manager. A variety of different business and finance theories and activities will address the tools of the trade of
finance:

The course syllabus includes the following main topics:

1. Accounting for business transactions.

Accounting for business transactions is a very important means of communicating business performance to key
stakeholders as well as a precursor for budgeting and ensuring strategic goals are achieved.

1.1 : Examine the important role of the financial manager in an organisation.

1.2 : Summarise the key financial statements of performance, position and cash flow.

1.3 : Convert business transactions into financial statements using the double-entry bookkeeping system.

2. The costing, pricing and investment decision.

The costing and pricing decisions are influenced by numerous internal and external factors, whilst the investment
decision involves allocating funds to assets that will generate value for the business.

2.1 : Review economic and business concepts informing the costing, pricing and investment decision making
process.

2.2 : Introduce fixed and variable costs and how the contribution margin can improve financial decisions in various
business scenarios.

2.3 : Explain the difference between discounted and non-discounted investment appraisal techniques, considering
the opportunity cost of capital.

7
3. Employability and CV Impact:

3.1 : Provide students with foundation skills for a career in business and finance.

3.2 : Develop negotiation and communication skills underpinning HRM, marketing and management concepts from
a finance perspective.

8
Guidance:

Students are encouraged to be inquisitive and innovative in their approach as to what should be included in this
report the following may be of some use in providing guidance as to what could possibly be included, although this is
in no way meant to be prescriptive.

As part of your work, you should explore the underlying theory behind the key areas of investigation that you identify
and appropriately referenced comments and quotes to sources to demonstrate wider reading. Additionally, the
inclusion of some practical/real world examples to act as support/explanation for your evaluative comments is
encouraged. Numerical example for illustrative purposes may be of use but should not be the only element of the
work; discussion and interpretation of models and concepts is also required.

Please avoid relying too heavily on descriptive sections reproducing information available from the set text. It is your
own logical, evaluation of the situation, the interpretation of course material and presentation, with critical analysis,
of a coherent strategic report that will attract high marks.

No PDF’s. Assignments must be submitted to Turnitin as a word document.

No photographs. Calculations must be presented using functions available in word.

Please note that the company names are fictitious and do not exist.

Word Limit:

The word count must be stated on the front page of your assignment.

Summarising and compressing the information in your assignment into the word limit is one of the skills that students
are expected to acquire and demonstrate as part of the assignment process.

If the word limit is exceeded for any task, then the following penalties be applied:

Penalty
Exceeds limit by up to 20% No penalty – tolerance band
Exceeds limit by 20.1 – 25% 5 percentage points
Exceeds limit by 25.1 - 30% 10 percentage points
Exceeds limit by 30.1 - 35% 15 percentage points
Exceeds limit by 35.1 - 50% 20 percentage points
Exceeds limit by more than 50% Mark of zero

The word count does not include:

• Title page
• Reference list/Bibliography
• Appendices
• Appropriate tables, figures and illustrations

Please note, in text citations [e.g. (Smith, 2011)] and direct secondary quotations [e.g. “dib-dab nonsense analysis”
(Smith, 2011 p.123)] are included in the word count.

9
 The Use of Tables

Tables should not include large amounts of text which represent the main discussion and arguments, as these
should be included in the main body of your work.

If tables are used inappropriately in this way the wording in question will be deemed to be part of the main body of
the work and included in the word count (with the relevant penalty imposed where the maximum word count has
been exceeded).

Early reassessment

At the module leader’s discretion. early reassessment is offered where:

• There has been what the marker judges to be a reasonable attempt at the assessment.
• There is no pending academic misconduct allegation.

Please refer to Section 4.3 of the Undergraduate Academic Regulations 2024-25 for further details.

Late work penalties**

Time work is Penalty

submitted after the
deadline

Within 24 hours No penalty

5% deduction from total mark (or awarded mark if lower than
2-3 days pass mark)*
10% deduction from total mark (or awarded mark if lower than
4-5 days pass mark)*
15% deduction from total mark (or awarded mark if lower than
6-7 days pass mark)*
More than 7 days Automatic fail, a mark of 0 is awarded

*Penalties within 7 days cannot reduce the mark below the pass mark (typically 40%); in such instances, the mark
should be capped at the pass mark.

**Late work penalties apply to Sunderland and London Campus provision onlyfor 2023/24, and to all provision from
2024/25.

10
 Categories
Grade Relevance Knowledge Analysis Argument and Structure Critical Evaluation Presentation Reference to Literature
86 – The work examined is exemplary and provides clear evidence of a complete grasp of the knowledge, understanding and skills appropriate to the Level of the
100% qualification. There is also unequivocal evidence showing that all the learning outcomes and responsibilities appropriate to that Level are fully satisfied. At this level it is
expected that the work will be exemplary in all the categories cited above. It will demonstrate a particularly compelling evaluation, originality, and elegance of argument,
interpretation or discourse.
76-85% The work examined is excellent and demonstrates comprehensive knowledge, understanding and skills appropriate to the Level of the qualification. There is also
excellent evidence showing that all the learning outcomes and responsibilities appropriate to that level are fully satisfied. At this level it is expected that the work will be
excellent in the majority of the categories cited above or by demonstrating particularly compelling evaluation and elegance of argument, interpretation or discourse and
some evidence of originality.
The work examined is of a high standard and there is evidence of comprehensive knowledge, understanding and skills appropriate to the Level of the qualification.
70 – There is clearly articulated evidence demonstrating that all the learning outcomes and responsibilities appropriate to that level are satisfied At this level it is expected
75% that the standard of the work will be high in the majority of the categories cited above or by demonstrating particularly compelling evaluation and elegance of argument,
interpretation or discourse.
Directly relevant to A substantial Comprehensive Well supported, focussed Contains distinctive Well written, with Critical appraisal of up-to-
60 – the requirements knowledge of analysis - clear argument which is clear or independent standard spelling date and/or appropriate
69% of the assessment relevant material, and orderly and logically structured. thinking; and begins and grammar, in a literature. Recognition of
showing a clear presentation to formulate an readable style with different perspectives.
grasp of themes, independent position acceptable format Very good use of a wide
Pass

questions and in relation to theory range of sophisticated

issues therein and/or practice. source material.
Some attempt to Adequate Significant Generally coherent and May contain some Competently Uses a good variety of
50 – address the knowledge of a fair analytical logically structured, using distinctive or written, with only literature which includes
59% requirements of range of relevant treatment which an appropriate mode of independent thinking; minor lapses from recent texts and/or
the assessment: material, with has a clear argument and/or may begin to standard grammar, appropriate literature,
may drift away intermittent purpose theoretical mode(s) formulate an with acceptable including a substantive
from this in less evidence of an independent position format amount beyond library
focused passages appreciation of its in relation to theory texts. Competent use of
significance and/or practice. source material.
40 – Some correlation Basic Some analytical Some attempt to construct Sound work which A simple basic style Evidence of use of
49% with the understanding of treatment, but a coherent argument, but expresses a coherent but with significant appropriate literature
requirements of the subject but may be prone to may suffer loss of focus position only in broad deficiencies in which goes beyond that
the assessment addressing a description, or to and consistency, with terms and in uncritical expression or referred to by the tutor.
but there are limited range of narrative, which issues at stake stated only conformity to one or format that may Frequently only uses a
instances of material lacks clear vaguely, or theoretical more standard views pose obstacles for single source to support a
irrelevance analytical mode(s) couched in of the topic the reader point.
purpose simplistic terms
35 – Relevance to the A limited Largely A basic argument is Some evidence of a Numerous Barely adequate use of
39% requirements of understanding of a descriptive or evident, but mainly view starting to be deficiencies in literature. Over reliance
the assessment narrow range of narrative, with supported by assertion formed but mainly expression and on
may be very material little evidence of and there may be a lack derivative. presentation; the material provided by the
intermittent, and analysis of clarity and coherence writer may achieve tutor.
may be reduced to clarity (if at all) only
its vaguest and by using a
least challenging simplistic or
terms repetitious style

11
 The evidence provided shows that the majority of the learning outcomes and responsibilities appropriate to that Level are satisfied – for compensation consideration.
Fail

30 – The work examined provides insufficient evidence of the knowledge, understanding and skills appropriate to the Level of the qualification. The evidence provided
34% shows that some of the learning outcomes and responsibilities appropriate to that Level are satisfied. The work will be weak in some of the indicators.

15-29% The work examined is unacceptable and provides little evidence of the knowledge, understanding and skills appropriate to the Level of the qualification. The evidence
shows that few of the learning outcomes and responsibilities appropriate to that Level are satisfied. The work will be weak in several of the indicators.
0-14% The work examined is unacceptable and provides almost no evidence of the knowledge, understanding and skills appropriate to the Level of the qualification. The
evidence fails to show that any of the learning outcomes and responsibilities appropriate to that Level are satisfied. The work will be weak in the majority or all of the
indicators.

12
13