Accounting

Accounting

Paper instructions:
Your assignment also requires you to provide a formal business report max 1,500 words, to your Bank Manager regarding the launch of the same business that you presented in your pitch (Section A). The word count excludes your appendices. You must include within the appendices the supporting business documentation requested below.
Your final submitted report and appendix is to be submitted using the student portal. It should clearly show your student number only (no names) be submitted no later than 11th August 2013 at 7pm sharp. Late submissions will be capped at 40% of your total marks for this section. Any extenuating circumstances should follow proper procedures. Marks will be returned via the student portal within two weeks of the deadline.
In the report:
? Introduce your business and your idea to the bank manager and ensure you state how
much you intend to borrow and how you intend to make repayments.
Marks 5%
? State your chosen business and what products you intend to sell and the cost price to produce it and its intended selling price. Provide in your own words, background as to the general price of these or similar goods available in the London area and who are the competitors. Include sources for your research, and avoid making general assumptions or remarks about the industry/market – the reader is more interested in the financial aspects than the aesthetics of the product. (max 350 words),
Marks 15%
? Explain in your own words how you arrived at the figures for each cost with supporting assumptions regarding cost behaviour (fixed or variable), measurements, quantities (including demand) and prices and also an explanation regarding which method of pricing you used to arrive at the target selling price and the underlying assumptions to support your figures for break even point. (max 550 words),
Marks 25%
? Provide a suitable summary of the business report remarking on the figures from your calculations and business documentation (appendices) (max 200 words).

Section C Appendices to the Business Report:
? Produce a per unit cost statement showing the main costs groups involved and the calculation for target selling price.
Marks 5%
? Calculate a breakeven point.
? Prepare a One (1) Year Operational Budget based on your cost structure and
production/sales pattern.
Marks 10%
? Prepare a Five Year Budget Income Statement using marginal costing principles and the following information:
o Your market is growing by 3.5% each year – only your sales and variable costs will be affected
o You should plan to reduce fixed costs by 10% year on year o Ignore Taxation
Marks 10%
? Undertake a five year net present value appraisal of your new business, using the following information:
? Your initial investment costs are your total costs for the first year only ? Your marginal profit is your net cash inflows
? Cost of capital will be 8%
? Ignore taxation and inflation
Marks 10% Section B & C Total 100%
Marks 5%.