PERCENTAGE OF FINAL GRADE:                                     25%

Learning Outcome Details

Assessment Feedback:

Students who submit their work by the due date will receive their marks and feedback within 15 days of submission.

1.   This assignment is  worth 75 marks and will be scaled to 25 marks.

2.   This assignment is  to  be  submitted in groups of three or four.

3.   This assignment is to be submitted ONLINE ONLY (You are NOT required to  submit a hard copy).

4.   EACH GROUP must complete the Group Assignment Declaration Form (each student should electronically sign the sheet). Failure to do so will incura penalty of 3 marks.

5.   The completed assignment must be submitted into the submission folder in the

Assessment Tile. (Assessments -> Assignments). You MUST submit ONE ELECTRONIC COPY (ONLY) PER GROUP. MORE THAN ONE SUBMISSION IN A GROUP WILL ATTRACT A PENALTY     OF 6 MARKS.

6.   Individual submission is NOT encouraged and will be penalized 6 MARKS unless special permission has been given by the unit coordinator. (Special permission will only be given under extenuating circumstances. Not being able to find a group member is not an acceptable excuse. Speak to your lecturer if you are not in a group well in advance of the assignment’s due date.)

7.   This assignment covers topics 5-9.

8.   You are not required to upload an Assignment Cover Sheet. You will complete a  Plagiarism declaration when you access the Submission Folder.

9.   Once submitted you cannot take your assignment back BUT you CAN SUBMIT another version. The most recent version submitted will be marked.

10. Please refer to the rubric for guidance on the marking structure.

11. WORD COUNT: No minimum or maximum word count applies, unless specified. Students should ensure all parts of the assignment are answered fully and give themselves the best opportunity   to maximise their marks per question.

A Note on Plagiarism and Collusions

Plagiarism and collusion are forms of cheating and is considered a serious academic misconduct, and severe penalties  are  associated with them. Please refer to the  MAA104 unit  outline for your responsibilities with regards to plagiarism and other  academic  offences.

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.

Any work you submit may be checked by electronic or other means for the purposes of detecting collusion and/or plagiarism. You should check that you can seeyour assignment in the Assignment Submission folder after upload.

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 Coordinator 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 subject Unit Outline.

MAA104-Financial Literacy Group Case Study Assignment

a.   John and Emily are both environmental enthusiasts with a background in engineering. They decide to start a business that focuses on developing eco-friendly reusable utensils and straws. They form a  general  partnership  called  "GreenTech  Tools  Solution."  John  invests  more  capital  into  the business, while Emily contributes her technical expertise. They share profits and losses equally. This ownership structure allows them to combine their skills and resources effectively. However, disagreements arise when making major decisions. Despite a successful start, conflicts over the direction of the business lead to astrain in their partnership. They realize the importance of a clear partnership agreement and opt to work with a mediator to resolve their differences.

Please answer the following questions relating to the scenario provided above: -

i.     What  advantages  did John and  Emily gain by forming a partnership for GreenTech Tools Solutions instead of pursuing individual ventures? Provide four (4) advantages.         (4 marks)

ii.     What key issues would you suggest they have included in the agreement?                (4 marks)

iii.     How do the roles and responsibilities of John and Emily complement each other within the partnership?       (4 marks)

iv.     What  potential  conflicts  or  disagreements  might  arise  due  to  the  equal  profit-sharing arrangement? How could they be addressed?                           (4 marks)

v.     How important is a well-defined partnership agreement for the success and sustainability of GreenTech Tools Solutions?    (3 Marks)

vi.     In  the  event  of  a  disagreement  between John  and  Emily  that cannot  be  resolved, what options do they have to manage or dissolve their partnership?                       (6 marks)

b.   John and  Emily,  have taken a proactive approach to their future plans. They have identified a promising commercial property in Bayswater that they intend to acquire three years from now. The current market value of this property stands at $820,000, and it is anticipated to appreciate annually at a rate of 4.7% p.a. compounded annually.

Given the bank's requirement for a 20% down payment based on the property's projected value three years down the line, John and Emily need to determine the amount they must set aside for this deposit and the overall property purchase. Furthermore, they must assess whether there are any additional funds they should allocate to cover initial expenses and the property settlement. They envisage requiring $80,000 as renovation cost to transform the current facility into a factory and  store. They  have  also  ascertained  stamp  duty  costs  amounting  to  $50,000  and  all  other incidental cost of approximately $20,000 .

It's essential to factor in all the profits their eco-friendly kitchen tools partnership has accumulated up to this point when making these financial calculations. Please provide a detailed breakdown, including any applicable formulas and variables in answering the questions below. (10 marks)

i.      Calculate the Future Value of the Shop-Lot in 3 Years:

ii.       Calculate the Required Deposit (20% of Future Value):

iii.      Calculate the Initial Costs and Settlement Expenses if the property purchase is togo

ahead and determine the total funds needed for purchase in three years’ time. Identify all the cost John and Emily would expect to incur when purchasing a property. Determine the Total Funds Needed for Purchase.

c.   John and Emily were approached by their friend who works as a Fund’s Manager to invest in an investment that promises them 9% p.a. compounding monthly for three years. What should their initial  investment  be to ensure that they  have enough funds  needed for the  purchase  of the property in three years? They are aware that the interest rates paid by the banks on term-deposits are currently pay around 5.2% for a 36-months term.

i.       How much can John & Emily expect to invest now to ensure that they have sufficient

funds needed for the purchase of the property in three years’ time should they invest at 9%p.a. in the fund recommended by their friend? What are the risks involved if they go  ahead with this project?

ii.      What are the advantages and disadvantages of placing this amount in a term-deposit? (10 marks)

d.   John and Emily have supplied you with the following information to assist in preparing a Cash

Budget for January 2024 for their business, GreenTech Tools Solutions. They have recently

secured a one-year contract to supply kitchen utensils for the 2024 season of Master Chef 2024 and provide utensils to major restaurants in Melbourne. The business has retained earnings of   $187,000, and the cash balance as of January 1, 2024,stands at $35,000.

All sales are credit-based and are collected as follows:

70% of sales are collected in the same month as the sale.

30% of sales are collected in the month following the sale.

Purchases are also on credit and are settled as follows:

60% of purchases are paid in the same month as the purchase.

40% of purchases are paid in the month following the purchase.

The Sales and Purchase figures areas follows: -

Here are additional financial details:

i)     The business plans to secure a $50,000 small business loan from Eastpac Bank at the

end of January 2024, with repayment scheduled end June 2026. This loan carries a variable interest rate of 6.24% per annum for a 3-year term.

ii)    Monthly selling and administrative expenses amount to $50,000. These expenses include a monthly depreciation charge of $8,000.

iii)   Sales commissions equal 11% of the total monthly sales and are paid to the staff at the end of each month.

iv)   Equipment costing $40,000 is expected to be purchased in November 2023 and fully paid for in January 2024 with cash.

v)    John and Emily each withdraw $6,000 from the business every month.

Required:

Please prepare a Cash Budget for the month of January 2024. Advise John and Emily on the cash   balance at the end of this period. Show your workings clearly. Discuss options with regards to the business loan that they intend to takeout.       (15 marks)

e.   The following question relates to the attached article by Jim Schell on business growth and financial statements, “Growing your small business: Is faster better?”  [See Week 6  Reading in  Moodle]. Reading between the lines in this article, the author is suggesting that small business entrepreneurs at some point need to make the subtle transition from working IN the business to working ON the business – Entrepreneur to Manager! In other words, devoting less of their energy in the pursuit of customers and focusing on Sales to training and empowering employees when growing the business.

The author distinguishes between healthy growth and unhealthy growth with reference to the Profit & Loss and Balance Sheet and supports his ideas with clear explanations.

Required:

You are provided with the following data taken from the financial statements of Alpha Pty Ltd. and Beta Pty Ltd:

You are required to identify the company with healthy growth and the company with unhealthy growth. Please apply your knowledge and understanding of financial statements and Ratio

Analysis to specific ratios that the author might be referring to in making his point! Calculations should be used for illustration purposes. [Please refer ONLY to the MAA104 - Formula Sheet for Ratio Analysis.] .               (15 marks)

TOTAL ASSIGNMENT MARKS                                                            75 MARKS