Assessment InformationThis assignment is designed to assess learning outcomes:1. Critically analyse different patterns of

Assessment InformationThis assignment is designed to assess learning outcomes:1. Critically analyse different patterns of cost behaviour and apply cost-volume-profit analysis to business decisions2. Apply the discounted cash flow and other techniques to capital investment decisions3. Critically evaluate the performance of an organisation using financial and non-financial measuresThis assignment is an individual assignment.Answer all three questionsQuestion 1Yousef Ltd manufactures and sells iron gates. The Executive Manager is reviewing the budget for the best-selling gates for next year because the company is studying how to maximise operational performance. The original budget provides that the estimated salesThis document is for Coventry University students for their own use in completing their assessed work for this module and should not bepassed to third parties or posted on any website. Any infringements of this rule should be reported to acreg.fbl@coventry.ac.ukAssignment Brief TemplatePage 2 of 9will be 80,000 units. With an average price of £50, the total sales will thus be £4,000,000. At this level of sales, the variable costs would be £1,600,000, while fixed costs would be £1,400,000.Eyad Alsaid, the Sales Manager suggests that if the price of the gates is lowered to £40, the sales volume is estimated to maximise by 50%.Naglaa Hassan, Marketing Manager, has a different point of view. She assumes that the best way to maximise the company’s sales is to increase the marketing campaign in all of its current markets. She believes that a 20% increase in sales will require an additional marketing campaign at a cost of £200,000.The Board Director requested some figures and financial advice to help determine which of the three strategies would be adopted:1. Stay with the original budget2. Adopt Eyad’s3. Adopt Naglaa’s(Each alternative should be evaluated separately).Required:You are required for each of the three strategies to:a) Using the Cost Volume Profit model, calculate:(i) The profit(ii) The breakeven point in £’s and units(iii) The margin of safety(iv) The sales level that would be required if the company wished to make a profit of £1,400,000(15%)b) Based on the calculated results for each strategy in part (a) above, assess and advise the Board Director on the strategy that they should adopt and the reasons behind it.(25%)c) Critically assess the four basic assumptions of the Cost Volume Profit model used in part (a), with a special emphasis on the retail industry/your own sector.This document is for Coventry University students for their own use in completing their assessed work for this module and should not bepassed to third parties or posted on any website. Any infringements of this rule should be reported to acreg.fbl@coventry.ac.ukAssignment Brief TemplatePage 3 of 9(30%)d) Explain different methods of cost classification, and Detail how classifying cost in different methods helps to make management decisions in the retail sector (Support your answer with relevant examples).(30%)1000 word maximum for parts b, c, and d of question 1.(Total 100%)Question 2Alsaid Ltd is a large retail company investing in a new project that contains the following information:Initial Investment £4,500,000Life of Project 8 yearsEstimated annual cash inflow £800,000 per annumResidual Value £200,000The company’s capital cost is 7%, and the hurdle rate is used 9% when evaluating capital projects.Required:a) Determine the financial viability of the investment by calculating the project’s: Payback Accounting Rate of Return Net Present Value (Using the cost of capital) Net Present Value (Using the hurdle rate)(10%)b) Explain in detail the results of your calculations in part (a) above. Make sure that you specify whether the project should be executed. Justify your answer.(Candidates are encouraged to research what constitutes a reasonable return in today’s business environment).(30%)c) Critically assess the use of the above models in the retail industry/your own sector given any unique industrial factors such as an enterprise size.(60%)750 words maximum for parts b and c of question 2.(Total 100%)This document is for Coventry University students for their own use in completing their assessed work for this module and should not bepassed to third parties or posted on any website. Any infringements of this rule should be reported to acreg.fbl@coventry.ac.ukAssignment Brief TemplatePage 4 of 9Question 3MEEDCO is a retail firm with two particularising divisions in selling luxury biscuits and juices. The results of the past year are as follows:£’000Division Biscuits JuicesSales 20,000 12,000Operating Profit 5,000 3,000Capital Employed 12,000 5,000The firm’s senior management currently uses Return on Capital Employed (ROCE) to both measure and reward the operational performance of each division.The firm has a 5% capital cost.Required:a) Given the advantages and disadvantages of a divisionalised structure for retail firms, discuss whether you would support the implementation of such a structure as in MEEDCO.(20%)b) Identify and assess the ROCE per division.(10%)c) Using the firm’s 5% capital cost, identify and comment on the Residual Income per division. (10%)d) Non-financial, as well as financial, performance measures are essential for the success of enterprises in the retail sector. Using a balanced performance card, select and justify performance metrics for use in the retail sector/ your own sector. Select four measures for each of the four dimensions of a balanced performance card.(60%)750 words maximum for question 3.