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28/02/2022, 13:14 ACC211 Task 2 Rubric https://learn.usc.edu.au/courses/563/rubrics/9719 1/4 ACC211 Task 2 Rubric ACC211 Task 2 Rubric 28/02/2022, 13:14 ACC211 Task 2 Rubric https://learn.usc.edu.au/courses/563/rubrics/9719 2/4 Criteria Ratings Pts 15 pts Demonstrate critical thinking to develop and evaluate appropriate solutions to business (Faraday Scooters Pty Ltd ) problems using an Excel spreadsheet. (Appraisal and comparison of investment projects using investment evaluation techniques) . Question 1, 2, and 3 (50 Marks) 15 to >12.6 pts High Distinction Advanced Evidence advanced capacity for critical thinking, evidenced by proposing, critically evaluating and justifying an effective and innovative business solution. 12.6 to >11.1 pts Distinction Effective Proposes an effective business solution that demonstrates a sound capacity for critical thinking. The solution and evaluation reflect the complexity of the business problem. 11.1 to >9.6 pts Credit Developing Presents an appropriate business solution. Demonstrates some capacity for critical thinking in developing and evaluating the solution. 9.6 to >7.35 pts Pass Basic A basic solution is presented that solves the business problem. 7.35 to >0 pts Fail Undeveloped Demonstrates limited or no capacity to think critically to develop and evaluate solutions to business problems. 28/02/2022, 13:14 ACC211 Task 2 Rubric https://learn.usc.edu.au/courses/563/rubrics/9719 3/4 Criteria Ratings Pts 6 pts Knowledge of the decision-making process. (Demonstrate knowledge and application of the Efficient Market Hypothesis and Capital budgeting evaluation criteria). Question 4 and 7(20 Marks) 6 to >5.04 pts High Distinction Comprehensive Demonstrates comprehensive knowledge of decision making processes and their complexity. Evaluates a variety of issues, priorities and cognitive biases that influence the decision- 5.04 to >4.44 pts Distinction Discerning Demonstrates sound knowledge of decision making processes. Appreciates potential cognitive biases that influence the decision- making process. 4.44 to >3.84 pts Credit Developing Demonstrates adequate knowledge of decision making processes. 3.84 to >2.94 pts Pass Foundational Issues related to the context have been outlined. A basic review of the priorities around the problem has been identified. 2.94 to >0 pts Fail Undeveloped Demonstrates little or no knowledge of decision- making processes and does not identify cognitive biases that influence the decision- making process. 28/02/2022, 13:14 ACC211 Task 2 Rubric https://learn.usc.edu.au/courses/563/rubrics/9719 4/4 Total Points: 30 Criteria Ratings Pts 9 pts Identification and critical analysis of pertinent issues in a business context. (Assessment of sensitivity and scenario analysis) Question 5 and 6 (30 Marks) 9 to >7.56 pts High Distinction Critical Insightfully identifies, prioritises, and justifies business context. Uses relevant discipline-based theory, frameworks and principles to critically evaluate these issues. 7.56 to >6.66 pts Distinction Systematic Systematically identifies and prioritises, pertinent issues in a business context. Critically analyses and evaluates these issues through application of discipline- based theories, frameworks and principles. 6.66 to >5.76 pts Credit Developing Identifies and demonstrates developing capacity to critically analyse pertinent issues in a business context using relevant theories and frameworks. 5.76 to >4.41 pts Pass Basic Issues are identified, described and sorted into a clear framework or groups. 4.41 to >0 pts Fail Undeveloped Demonstrates inadequate capacity to identify and analyse issues in a business context. ACC211 Task 2: Project Evaluation (Faraday Scooters Case Study) Due Date: (Sunday) 15 may 2022 by 11.59pm (AEST) Product: Excel based feasibility study with short answer questions Assessment Weight: 30% 1500 words Excel calculation is not included in word count Faraday Scooters Pty Ltd is a newly established Australian electronic scooter (ES) company, founded and headed by Gene Berdichevsky, a former Tesla battery engineer. Faraday Scooters is looking to enter the growing scooter hobby markets in Australia, Singapore, and the Philippines. They have identified three opportunities in the market that current electronic scooter manufacturers have not been able to address - more efficient batteries and strong build quality. Market Gap Assessment • Battery o A minimum of 27 hours of use per charge o Minimal battery degradation (able to maintain 92% of initial charge over 10 years). o Military standard build quality During the past year, Faraday Scooters invested $250,000 in the research and development of scooters, which resulted in the company successfully creating viable prototype electric scooters (Rusk – TX and OGT lines) are aimed at addressing the identified ES market gaps. Product Description • Rusk – XT: A premium build standard aimed at the high-end adventure segment of the electronic scooter market. This product is technologically advanced with full iPhone and Android functionality within a built-in head unit as standard. Suspension is designed for extreme off-road conditions. The battery life of this scooter is capable of 34.5 hours before needing to recharge. • OGT: This is the company's entry level scooter aimed at the commuter segment. This scooter is a down-spec'd version of the Rusk-XT. The OGT has a simple head unit built in with no smartphone integration. The suspension is high-quality, although it is not designed to be used in extreme off-road conditions. The battery life is slightly longer and can last 37 hours (due to the absence of the more advanced head unit) before needing to recharge. Project's Strategy Faraday Scooters CEO, Gene Berdichevsky, has approached you, the CFO of Faraday Scooters, asking for a feasibility study to see if the production of two scooters is financially viable for the company. Berdichevsky has given you information outlining the company's proposed strategy, including sales, cost and revenue projections, and other constraining factors impacting strategic timing and production volumes. This strategy was developed in conjunction with all executive-level departments. Details of the proposed project Below is a breakdown of the proposal. • The life of the project is proposed to run for 5 years, starting from 01/07/2022. • Head of Marketing, Ted Kennedy, has conducted market research and has identified Australia, the Philippines and Singapore as viable markets where Faraday Scooters will be selling both models. All sales will be conducted in AUD (no need to worry about exchange rates). • Net Working Capital will require $220,000 in year 0 (At the beginning 01 July 2022), and then be recuperated in the final year. • The Faraday Scooters Marketing department will be allocated $670,000 at year 0 (At the beginning 01 July 2022) as part of the brand awareness strategy, and then 26% of the projected sales revenue for each year (30 June 2023 and so on) after that. This marketing expense will be directly used to market this project to potential consumers. • Australia's current corporate tax rate of 30% will need to be considered within this feasibility study. • There will need to be a discount rate applied to the feasibility, and this must incorporate the costs of equity and the cost of debt. o The project's capital structure will be 60% equity and 40% debt. o Comparable operations are seeing equity holders demanding 15% in return. Faraday Scooters expects the price they pay for equity will be 17.5%, given the current conditions. o You have approached Jamie Irving from Deloitte for help concerning debt financing. He has advised that they can fund the portion of the debt at 9.75% interest. This is 2.75% above market rates, although it is the best you can find. o Given this information, you have concluded that you must meet a weighted average capital cost (WACC) of 14.4% to satisfy both equity and debt holders. This means the required rate of return (r) or discount factor is 14.4%. Facilities • The project's distribution strategy requires one facility to be in Australia and one in close proximity to the Philippine and Singapore markets. Facility and Asset Management Director, Alana Johnson, has recommended the production to be in Melbourne, Australia, and Manila, Philippines. This is a strategic decision as it is due to the 'clustering' of manufacturing skills around these areas. Johnson has identified two lots: o Address: 3 Freight Drive, Somerton, Victoria. Price: $870,000 incl. fees and charges. Projected annualised growth rate during the 5-year period (2022- 2027): 6.10% growth p.a. (think facility sale) o Address: 838 San Pablo, Mandaluyong, Metro Manila, Philippines
Price: $391,500 incl. fees and charges. Projected annualised growth rate during the 5-year period (2022- 2027): 7.95% growth p.a. (think facility sale) • Daniel Baily, the Chief Cost Estimator, who works under you, has identified that both facilities will require a fit-out of capital equipment to be installed before production can begin. This cost will be incurred immediately at the start of the project. o Australian Facility: $670,000 o Philippine Facility: $420,500 Each facility will require two updates during the project's life, with the first occurring at the start of year 2 and is estimated to be at the cost of 35% of the original fit-out cost for both facilities, and the next at the start of year 4, also being estimated at the cost of 35% of the original fit-out cost for both facilities. Henry expects that inflation applicable to this capital equipment will be 3.8% per year between year 0 and 2 and 2.5% per year between year 2 and 4. The original capital equipment will still be in use, the updates will be added to existing equipment at each stage. The equipment's salvage value (selling price) at the end of the project is expected to be $400,000. • Depreciation will be a straight-line method over 5 years and applicable only to fit out of capital equipment. This means you will need to depreciate all capital expenditures over a 5-year timeframe. Sales • Ted Kennedy has projected price and sales forecasts based on yearly demand estimates for the scooters. Sales will commence in year 1, taking time to build the facilities. In year 3, the company is projected to experience a drop in sales and will need to update these two models, and as such, they will also see an increase in their sales price (there is also a facility update allowance). The updated versions will hit the market at the start of year 4. Sales volume and price breakdown of each model Faraday Scooters – Sales Units Scooter Year 1 Year