FELM4026 Financial and Economic Literacy for Managers

FELM4026 Financial and Economic Literacy for ManagersPaper details:Please use UK English language not USA English.Semester: C16 – Summer 2016Module Code: FELM4026Module Title: Financial and Economic Literacy for ManagersProgramme BSc (Hons) Business Management with E-commerceBSc (Hons) Business ManagementBSc (Hons) Enterprise and Small Business DevelopmentBSc (Hons) Human Resources with ManagementBSc (Hons) Oil and Gas ManagementLevel: Level 4Awarding Body: University of PlymouthModule Leader Constance VigilanceFormat: EssayPresentation: NoAny specialrequirements:All work should be submitted on the Student Portal along withan acceptable Turnitin ReportWord Limit: 2,500 words (+ or – 10 percent)Please include a word count in your submissionDeadline date forsubmission:Thursday August 18, 2016 at 2pmLearning outcomes tobe examined in thisassessmentAt the end of this module students will be expected to be able to:1. Explain the principles of business and financialeconomics in an international context2. Identify and explain the impact of governmental,monetary and economic policy on decision making in abusiness context.3. Describe and apply macro and micro concepts andmodels to business decision making.4. Interpret financial information (external and internal) andapply to decision making within a business context.5. Discuss the rationale and impact of decisions forbusiness strategies to users and stakeholders.6. Examine and discuss the relationship between theory,application in business and financial economics in aninternational context.Percentage of marksawarded for module:The assignment account for 100 percent of the assessmentAssessment criteria Explanatory comments on theassessment criteriaMaximum marks foreach sectionContent, style,relevance, originalityContent will reflect the students’ abilityto understand and to analyse theFinancial and Economic Literacy forManagers (FELM4026) course as taught.Answers to be based on an interpretationof class handouts and evidence ofbackground reading.50%Format, referencing,bibliography• The limit is not a guide, it is aninstruction.• Do not stray into tangential material.Always ask yourself – is what I’vewritten relevant to the question set?• Copy and Paste. Please try to refrainfrom doing this.• Font size. Please use font size of TNR12 or Arial 12 size.• Use Double space.• Read (aloud) what you have written. Ifwe can’t understand your argument, youwill not get any credit for it.• The Study Skills Handbook and Moduleprovide detailed guidance on referencing.Ensure you reference your citations usingthe Harvard method.10 %Constructive criticalanalysis, introduction,conclusionCritical analysis is an important test ofthe student’s ability to evaluate businesseconomics and finance concepts.Introductions and conclusions shouldbriefly address the issues to be discussed.40%Candidates must clearly label their ID Number on additional separate reference, formula oranswer sheets.Assignment (2,500 words + or – 10 percent) Due on : Thursday August 18, 2016 at 2pmQuestion 1 (25 marks)(a) Explain the three classifications of production and give examples of eachclassification (5 marks)(b) Explain opportunity costs and give examples (5 marks)(c) Explain the purpose and evolution of the UK standard industrial classification (SIC)since 1948 (5 marks)(d) Explain with the use of two (2) separate diagrams, the shift in the demand curve andthe movement along the demand curve (5 marks)(e) Explain the income and substitution effect of an increase in price. (5 marks)Question 2 (25 marks)(a) Explain two types of markets and give examples of each (5 marks)(b) Define a public good and give examples of public goods (5 marks)(c) Explain the three ways in which government intervenes in the market and giveexamples (5 marks)(d) Explain the four key macroeconomic policy objectives that governments typicallypursue. (5 marks)(e) Explain the circular flow of income including the inner flow, withdrawals andinjections. (5 marks)Question 3 (25 marks)(a) Define and give examples of each of the four major areas of finance (5 marks)(b) Explain the determinants of market interest rates including the various types of riskpremiums (5 marks)(c) Explain the four basic financial statements, including formats and purpose. (5 marks)(d) Use the Marks and Spencer 2014 Annual Report financial statements on pages 88-91 ofthe Annual Report. Use the following link or see GSM Learn for the Annual Report.Link:http://corporate.marksandspencer.com/investors/b73df1d3e4f54f429210f115ab11e2f6You are required to calculate four (4) ratios – one (1) of each of the following categories– liquidity ratios, market value ratios, debt management ratios and asset managementratios – and explain what each ratio means for Marks and Spencer in the UK economy.(10 marks)Question 4 (25 marks)(a) Describe the importance of capital budgeting decisions and the general process that isfollowed when making investment (capital budgeting) decisions (5 marks)(b) Describe how the net present value (NPV) technique is used to make investment(capital budgeting) decisions (5 marks)(c) Explain the yield curve including the reasons why yield curves differ. Use diagrams.(5 marks)(d) Two projects being considered are mutually exclusive and have the followingprojected cash flows:Year Project A Project B0 -$50,000 -$50,0001 15,625 02 15,625 03 15,625 04 15,625 05 15,625 99,500If the required rate of return on these projects is 10 percent, which would be chosen and why?Show your calculations/explanations. (10 marks)