You are firstly required to choose a real company that is listed on the full London Stock Exchange (as opposed to the AIM). You are then required to take on the role of a project team within this company. Your team have been asked to develop a new product that will provide a competitive advantage for the organisation. The board of directors have allocated 10 million pounds to this project but are yet to establish which source of finance will be appropriate. You have been tasked as a team with making a financial case for the new product.
You must use your imagination to come up with a suitable product. You should then build a financial case for this product. The numbers used in your case will be fictional, but the assumptions that you make should be as realistic as possible. Requirement: You are required to critically conduct an investment appraisal of your product using appropriate methods (based on a 10 million pound investment). You should assume a cost of capital of 1Oo/o in your calculations. You will need to produce financial forecasts that include income, expenditure and cash flows as part of this exercise. The project should
have an economic life span of 5 years. You are required to present your investment appraisal as a group to a panel of lecturers who will be acting as the board of directors for the company chosen.
Your presentation should include the following, weighted accordingly:
1. The nature of the real company and fictionalproduct (Ao/o);
2. The rationale for and evaluation of the investment appraisal methods used (30%);
3. Clear schedule(s) showing forecasts and investment appraisal calculations (30%);
and
4. A critical appraisal of the assumptions made in the calculations (30%).
As a group, you will be allowed a maximum of fifteen minutes to undertake the presentation.
Groups should consist of no more than four individuals and groups should be agreed with the module tutor in advance. A schedule for the presentations (including times and location) will be provided nearer the date by the module tutor.
You may use Microsoft PowerPoint presentation slides (along with Excel or Word) to make your case. Two copies of the presentation slides and other documents must be handed to the panel of lecturers at the start of your presentation.