Up HND Bus U2 MFRD Apr2015

Topics: Citation, Financial statements, Finance Pages: 7 (1839 words) Published: August 7, 2015
Programme:HND BTEC Edexcel
Unit Number and Title:Managing Financial Resources and Decisions (Unit 2) Unit Level: QCF Level 4
Module Tutor:Chisomje Ezeaku

Date Set:27/04/2015

Key dates

Distribution date: 27/04/2015
Submission date: 03/07/2015
Return date: 4 weeks after submission


This unit is designed to give learners a broad understanding of the sources and availability of finance for a business organisation. Learners will learn how to evaluate these different sources and compare how they are used.

They will learn how financial information is recorded and how to use this information to make decisions for example in planning and budgeting. Decisions relating to pricing and investment appraisal are also considered within the unit. Finally, learners will learn and apply techniques used to evaluate financial performance.

Specification of Assessment


Using the case study above and relevant theories and literature, write an essay comprised of the following broad topics/sub-sections:

Requirement 1:
1.1 Why business needs finance and what are the available sources of finance to a business 1.2 Access and compare the implication of the different sources of finance Case 1
A medium-sized engineering firm with an annual turnover of £2.5 million has decided to install a new piece of machinery to help improve its productivity. The equipment needs to be housed in a new building to be constructed on the site. The forecast cost of the building is £150,000 and the equipment £400,000.

Case 2
An individual has been made redundant after 20 years with a major organisation and has received a lump sum redundancy payment of £70,000. The individual is planning to set up a bookmakers and has identified a suitable premises valued at £180,000 near to a major town centre shopping precinct.

Case 3
A large plc is planning on moving a major part of its production facility to Cornwall. It has identified a site near a former chalk pit that is now not used. The estimated cost of the facility is £4.5 million.

Case 4
A local Do It Yourself (DIY) store has experienced problems with acquiring goods from its suppliers because it has been an erratic payer of its bills with them. The reasons it has experienced these problems is that it has contracts to supply building materials to a number of local firms all of whom only pay the bills for their orders every 3 months.

Case 5
A rugby club is anticipating turning fully professional after the team secured promotion to the Zurich premiership. To take its place in the league, the league committee has insisted that it also improves facilities at the ground. It has been estimated that the cost of these two measures will be £550,000.

1.3 Critically evaluate the appropriate the sources of finance for the above mention businesses.

M1: Critically evaluate each available sources of finance to that particular firm. Evaluation should include the pros and cons, and legal aspects of each source. (Merit M1)

Requirement 2:
2.1 Analyze the costs of different sources of finance – review 2.2 Review the importance of financial planning
2.3 Explain the importance of information for the process of decision making M2: Discuss the real life firm example of a firm and briefly explain how that firm uses information for making an investment decision (Merit M2). 2.4 Explain how various sources of finance appear in different financial statements

Requirement 3:
3.1 Explain how financial decisions are based on budgeting
3.2 Explain by calculating the unit costs and make pricing decisions using relevant information 3.3 Compare the following investment appraisal approaches by showing calculation output; payback period, rate of return, net present value and IRR of given firm information. D1 and M3: Critically evaluate the...
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