This assignment is a group assessment. Palace Co. is a manufacturing company based in country Z, whose functional currency is Z£. Extracts from its most recent financial statements are shown below:

Assessment Information

This assignment is a group assessment.

Palace Co. is a manufacturing company based in country Z, whose functional currency is Z£. Extracts from its most recent financial statements are shown below:

Corporation tax is charged at 30%.

Palace Co has Z£ 8 million of long-term borrowings, on which it paid interest of 10% last year, and it has 50 million Z£ 1 share in issue. Palace Co. expects its interest rate to rise by two percentage points next year (to 12%). Also, a strengthening of the currency in Palace Co’s main export market will cause the Z£ value of Palace Co’s gross profit to rise to Z£ 70million next year. Operating expenses are forecasted to rise by 10% due to inflation and a potential tax reformation is anticipated to reduce tax to 25%.

You would agree that changes in economic variables such as tax, interest rates, inflation and exchange rates etc., can have impacts on a business’s ability to achieve its objectives as well as the economy in many ways.

Now write a report discussing the potential impact of changes in economic and business variables on the financial objectives of Palace Co. and the economy in general assuming everything else remain the same, and provide recommendations based on the likely challenges and opportunities from these changes.

Criteria for Assessment - How you will be marked

Task / Criteria Weighting

1. Analytical and evaluative skills – The report should provide a clear demonstration of the group’s
   sophisticated analytical and evaluative skills    50%
2.  Evidence of critical application to the group case study – The report should provide a clear demonstration of critical application to the group case scenario    25%
3. Recommendations – The report should recommend strategic actions the company can take to mitigate risks and leverage opportunities in a global context 10%
4. Presentation of the report (structure, coherence, clarity and references) – The report presented should demonstrate an understanding and application of advanced communication skills    15%

Detailed marking criterion is on Learning Zone. Further information on university mark descriptors can be found here. 
This assignment is designed to assess the following learning outcomes: 1 and 5:

1. Associate the relationship that exists between economic variables and business challenges in a global context.
5. Demonstrate academic research, writing & referencing skills

GROUP AGREEMENT FORM

We, the undersigned members of this group, undertake to be bound by the following agreement:
1. If you have a problem, you MUST contact your seminar tutor immediately.
2. To attend all group meetings on time, except when agreed by other group members in advance, or where a document excuse is provided.
3. To be well prepared for each meeting, ensuring that all relevant materials is adequately researched and presented.
4. To be actively involved in the work of the group, by contributing to the best of our abilities.
5. To participate in the editing and preparation of the final written report.

We agree that if a group member breaches these undertakings, then the group has the right to recommend a reduced mark for the individual concerned, below the group grade. In this eventuality, the group would submit reasons in writing to the seminar tutor.

We accept that the seminar tutor may require further information before making any penalty mark adjustments. We accept that the seminar tutor’s decision is final in these matters