Assignment Background
April 13, 2018
Identify the key issues in the NASA case study and explain how they are related to project management practice ?
April 13, 2018

Introduction
Mark Ford set up Baldwin’s, a vegetarian restaurant, in Manchester in 2011 as a sole trader.
The restaurant took a long time to become a success, which led Mark to be cautious about future growth predictions. However, in 2013 Mark took a month off to go travelling and left his sister Jessica in charge. During that month, Jessica managed to secure free publicity with a local newspaper, highlighting their successful relationship with local organic farmers. This generated a lot of interest in the business and sales revenue started to increase. Jessica subsequently became more involved in marketing the business and initiated several successful promotions, including a loyalty scheme for regular customers.
The business prospered and, by 2015, Jessica had persuaded Mark to open a new restaurant, which she could solely manage. She immediately started planning a new restaurant to be opened in Liverpool or Chester. The Liverpool restaurant would cost £400,000 to set up, whereas one in Chester would be £500,000.
In Chester, they could potentially charge higher prices. However, Liverpool has a larger population. Liverpool already has a well-established vegetarian restaurant, whereas in Chester there would be no direct competition. To help make the correct judgement, Jessica drew up financial data in order to compare the two (see below).
Balance Sheet as at 31 December 2014 (£000s)
Non-current assets (fixed assets)
£1,400
Current assets
Inventories (stocks)
Receivables
Cash
280
40
370
690
Current liabilities
Payables (creditors)
(240)
(240)
Net current assets (working capital)
450
Non-current liabilities (long-term liabilities)
(250)
Net assets
1,600
Capital and reserves
Share capital
200
Reserves
1,400
Total equity
1,600
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Management, Control and Accountability for Financial Resources © NCC Education Limited 2015
Income statement for Baldwin’s as at 31 December 2014 (£000s)
Revenue
4,200
Cost of sales
1,950
Gross profit
2,250
Expenses
1,750
Operating profit
500
Investment appraisal data for Liverpool restaurant
Investment appraisal data for Chester restaurant
Year
Annual revenue (£000s)
Annual cost (£000s)
Annual return (£000s)
Year
Annual revenue (£000s)
Annual cost (£000s)
Annual return (£000s)
0
0
400
(400)
0
0
500
(500)
1
1,000
900
100
1
1,300
1,150
150
2
1,050
925
125
2
1,450
1,280
170
3
1,150
960
190
3
1,550
1,340
210
4
1,250
990
260
4
1,695
1,415
280
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Management, Control and Accountability for Financial Resources © NCC Education Limited 2015
Assignment
In order to assess the feasibility of expanding the business, Mark and Jessica have asked you to produce a report that will demonstrate, firstly, whether they can fully afford this new venture and, secondly, which of the two locations will be the most profitable.
Task – 100 Marks
Marks
a)
The report should contain an analysis of Baldwin’s current financial data using FOUR (4) appropriate ratios.
24
b)
Assess how the current ownership structure may affect the funding of Baldwin’s and contrast this with THREE (3) other forms of ownership.
12
c)
Critically assess FOUR (4) suitable methods of finance that would be available to Baldwin’s and discuss their likely uses.
20
d)
The report will need to assess the performance of both restaurant locations, leading to judgement as to the preferred option. It is therefore necessary to calculate the Accounting Rate of Return in addition to the Net Present Value (based on a 5% discount rate). Once you have calculated these, you need to use the information obtained plus any relevant information from the text to support your answer.
5% Discount rate:
Year 0 = 1.0; Year 1 = 0.952; Year 2 = 0.907; Year 3 = 0.864; Year 4 = 0.823.
24
e)
If the organisation is to expand, Mark is keen to use the balanced scorecard method to manage and measure the organisation’s performance. Critically assess the impact that this could have on Baldwin’s if the organisation continues to grow.
20
Total 100 Marks
Guidance
Consult with your tutor if you are uncertain about any aspect of the assignment.
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Management, Control and Accountability for Financial Resources © NCC Education Limited 2015
Submission requirements
A single word-processed document containing all material pertaining to the task.·
The word count is 3000 words, not including the appendices.·
The document should be properly structured as an essay with a bibliography (online and literature sources) and appendices (where necessary). Refer to the Assignment Presentation Requirements for more information (see front cover).·
Produce clear and specific reasoning to justify answers.·
An electronic copy of the document must be submitted to NCC Education by email using this address: level7assessments@nccedu.com·
Work containing viruses, or work that cannot be run directly, will result in a fail grade being awarded for this assessment.·

 

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