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1. Explain the principles of business and financial economics in an international context (LO1).

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  • Post Date 2018-11-08T12:32:21+00:00
  • Post Category Assignment

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1. Explain the principles of business and financial economics in an international context (LO1).

Module Title:

Financial and Economic Literacy for Managers

Programme

BSc (Hons) Business Management with E-commerce BSc (Hons) Business Management

BSc (Hons) Enterprise and Small Business Development BSc (Hons) Human Resources with Management

BSc (Hons) Oil and Gas Management

Level:

Level 4

Format:

Answers to questions

Any special requirements:

All work should be submitted on the Student Portal before the deadline given below

Word Limit:

2500 words in total (+ or – 10%) Please include a word count

Format, referencing, bibliography

  • Do not stray into tangential material. Always ask yourself if the answers are relevant to the questions
  • Do not copy and paste.
  • Always reference your work using the Harvard Style. The Study Skills Handbook and Academic Skills Module provide detailed guidance on referencing
  • Use font size Times New Roman 12 or Arial 12.
  • Use Double space.
  • Read (aloud) what you have written. If we cannot understand your argument, you will not get any

 

marks.

Learning outcomes to be examined in this assessment

At the end of this module students will be expected to be able to:

  1. Explain the principles of business and financial economics in an international context (LO1).
  2. Identify and explain the impact of governmental, monetary and economic policy on decision making in a business context (LO2).
  3. Describe and apply macro and micro concepts and models to business decision making (LO3).
  4. Interpret financial information (external and internal) and apply to decision making within a business context (LO4).
  5. Discuss the rationale and impact of decisions for business strategies to users and stakeholders (LO5).
  6. Examine and discuss the relationship between theory, application in business and financial economics in an international context (LO6).

Percentage of marks awarded for module:

This assignment is worth 100% of the total marks for the module

Assessment criteria

Explanatory comments on the assessment criteria

Maximum marks for each section

Knowledge and Understanding of the Subject

Factual and conceptual knowledge and understanding; use of class materials; independent reading

45%

Cognitive / intellectual skills

Critical thinking; conceptualisation; creativity; synthesis, analysis and evaluation; application; problem-

30%

 

solving and research/investigation

 

Graduate – Transferable, Employability and Practical Skills

Written, oral and presentation skills; interpersonal, group and teamwork skills; leadership skills; numeracy; digital skills; practical, professional and academic skills (including referencing/presentation)

25%

Candidates must clearly label their ID Number on additional separate reference, formula or answer sheets.

 

Question 1 (25 marks)

 

(a)    Analyse the globalization of business (5 marks) (LO1)

(b)   Examine the growth strategies of firms (5 marks) (LO6)

(c)    Analyse how a shortage and a surplus will eventually lead to market equilibrium. Use diagrams (5 marks) (LO3)

(d)   Analyse the concept of economics (5 marks) (LO3)

(e)   Illustrate price elasticity of demand, including a numerical example. (5 marks) (LO3)

 

Question 2 (25 marks)

 

(a)    Analyse the oligopoly market structure (5 marks) (LO3)

(b)   One of the key macroeconomic policy objectives for a government to typically pursue is to maintain low inflation. Analyse what is meant by this and its importance, and identify the other three key macroeconomic objectives (5 marks). (LO2)

(c)    Evaluate competition policy in the UK. (5 marks) (LO2)

(d)   Using UK GDP growth rate for any 20 year period between 1980 and 2015, plot a graph and identify the various business cycle phases in the UK. (5 marks) (LO3) See data on GSM Learn

(e)   Compare and contrast automatic stabilizers and discretionary fiscal policy. Then examine the UK budget speech 2016 and identify the fiscal policy measures proposed in the budget, that is, the tax policy and expenditure policy, and decide on the fiscal policy stance in 2016 (5 marks) (LO2). See Budget 2016 executive summary on GSM Learn

 

Question 3 (25 marks)

 

(a)    Examine the four basic financial statements, including formats and purpose. (5 marks) (LO4)

(b)   Download a company financial statement (found in the company annual report) of your choice, for example, Next, Tesco, Marks and Spencer, and calculate five

(5) financial ratios, one each from the following categories– liquidity ratio, market value ratio, asset management ratio, debt management ratio and profitability

 

ratio for the year 2014. Then analyse these ratios either by comparing it to the industry average, or a similar company, or earlier years for the same company to determine the health of the company by deciding if each ratio is either, good or poor. In your answer, identify the sources of your financial statements. (10 marks). (LO4) and LO6)

(c)    Analyse financial planning and financial control. (5 marks). (LO5)

(d)   Examine the ways in which firms manage their working capital (5 marks) (LO6)

 

 

Question 4 (25 marks)

 

(a)    With reference to the September 2016 yield curve for the UK and the September 2016 yield curve for the US, analyse what a yield curve represent, and why yield curves differ. Use diagrams. (5marks) (LO6). See GSM Learn for data

(b)   Analyse the concept of risk and return. (5 marks). (LO1)

(c)    Suppose you borrow £20,000 for a business you own, and the loan is to be repaid in three equal payments at the end of each of the next three years at an interest of 8 percent. Calculate the Amortization schedule for the next three years (5 marks) (LO5) and (LO6)

(d)   Fanta deposits£400 at the end of the first year, £300 at the end of the second year, and £250 at the end of the third year. If the account earns 5.5 percent interest each year, calculate the future value of this uneven cash flow stream (5 marks) (LO5) and (LO6)

(e)   Two projects being considered are mutually exclusive and have the following projected cash flows:

 

Year

Project A

Project B

0

−$50,000

−$50,000

1

15,625

0

2

15,625

0

3

15,625

0

4

15,625

0

5

15,625

99,500

 

 

 

 

If the required rate of return on these projects is 12.5 percent, which would be chosen and why? Show your calculations/explanations.  (5 marks) (LO5) and (LO6)




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