- Explain the principles of business and financial economics in an international context.
- Identify and explain the impact of governmental, monetary and economic policy on decision making in a business context.
- Describe and apply macro and micro concepts and models to business decision making.
- Interpret financial information (external and internal) and apply to decision making within a business context.
- Discuss the rationale and impact of decisions for business strategies to users and stakeholders.
- Examine and discuss the relationship between theory, and application in business and financial economics in an international context.
1.
In a competitive economy, ‘consumer sovereignty’ assumes that buyers influence
production decisions. Discuss the notion that the pursuit of profit maximisation is
consistent with consumer sovereignty. You should explain the business economics
. (20 marks) (600 words).
concepts or models and practice
- Consumers obtain goods and services from several companies including Tesco, British Airways, the McDonald’s restaurant, and the hairdressers. Produce a report that critically examines the market structure, demand and supply. Your answer should include both the theory of business concepts and empirical evidences. (600 words) (20 marks).
3.
(Learning outcome 3 and 6) .
As a business manager, part of your day-to-day roles includes taking decisions on the firm’s resources (e.g. growing the business to achieve the firm’s objectives). Two concepts have been paramount to the objectives of financial management – wealth maximisation and profit maximisation. (a) Compare and contrast wealth maximisation and profit maximisation (300 words) (b) Discuss the statement that wealth maximisation is superior to profit maximisation (300 words). Your answer should include both the theory and concepts taught in this module with relevant hypothetical examples. (Total 600 words) (20 marks)
(Learning Outcomes 5 and 6)
Write a report that applies the business economics concepts of environmental policy, fiscal policy, supply side policies to the desire of the UK government to seek economic prosperity for the country. Your answer should include both the theory of these concepts and empirical evidence from the actions of the UK government. (600 words) (20 marks.)
(Learning Outcomes 2 and 6)
4.
(Learning outcome 1 and 6)
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FELM4026 SPRING 2019 COURSEWORK BRIEF
5 (a)
Extract from the Zenobia Limited accounts for the year ended 31 March 2018
Sales Turnover Operating costs Operating profit
Current Assets
Stocks 250 Debtors 2,168 Investment 798
Loans and other borrowing Other creditors
2017 £m
7,653 (5,778)
1,875
2018 £m 6876
(5,342) 1,534
208 1,945 252 55 2,460
303 1,794 2,097
363
2,715 907 2,036
5,658 (316)
5,342
Cash at bank
Creditors
A
61 3,277
265 2,568 2,833
444
2,807 933 2,345
6,085 (307)
5,778
Net current assets
Operating costs
Staff costs Depreciation Other
B A – B
Less cost of own stock
Ratio Analysis
Current ratio = Quick ratio =
Debtors payment period = Stock turnover period =
2017
2018
Required:
Based on the above information, calculate (a) the current ratio, (b) quick ratio, (c) debtors payment period and (d) Stock Turnover for 2017 and 2018. Show all your workings including formulae
(8 Marks)
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FELM4026 SPRING 2019 COURSEWORK BRIEF
5.
(b) Assume Adam has decided to pay £105 each month for the next three years rather than deposit these amounts in her savings account. If she can invest a lump-sum
amount in a savings account that pays 234 % interest per year, how much money does Adam need to deposit today to accomplish his objective?
(6 marks) [Hint: Present Value].
(c)
Tobe is proposing two mutually exclusive projects for a possible investment in the Greenford and Greenwich Boroughs of London. He has provided the following projected cash flows for your advice:
Year Project A
0 (£175,000)
1 0
2 0
3 0
4 0
5 175,000
Project B (£175,000) 60,000 30,000 25,000 20,000
40,500
If the required rate of return on these projects is 578 percent, which would be chosen and
why? Show your calculations/explanations. (6 marks) [Hint: Net Present Value] (100 words) (20 marks total)
(Learning outcomes 4 and 5)
