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Arden University © reserves all rights of copyright and all other intellectual property rights in the learning materials and this publication. No part of any of the learning
materials or this publication may be reproduced, shared (including in private social media groups), stored in a retrieval system or transmitted in any form or means,
including without limitation electronic, mechanical, photocopying, recording or otherwise, without the prior written consent of Arden University. To find out more about
the use and distribution of programme materials please see the Arden Student Terms and Conditions.
Introduction to Business Finance
Mock Paper
Time Constrained Assessment
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Arden University © reserves all rights of copyright and all other intellectual property rights in the learning materials and this publication. No part of any of the learning
materials or this publication may be reproduced, shared (including in private social media groups), stored in a retrieval system or transmitted in any form or means,
including without limitation electronic, mechanical, photocopying, recording or otherwise, without the prior written consent of Arden University. To find out more about
the use and distribution of programme materials please see the Arden Student Terms and Conditions.
Assignment Brief
As part of the formal assessment for the programme you are required to submit a
Introduction to Business Finance assignment. Please refer to your Student
Handbook for full details of the programme assessment scheme and general
information on preparing and submitting assignments.
Learning Outcomes:
After completing the module, you should be able to:
1. Explain different sources of business finance available to organisations
2. Apply basic management accounting techniques including budgeting,
investment appraisal and cost volume profit analysis
3. Interpret financial accounting information, perform and evaluate basic
accounting transactions and perform basic financial ratio analyses
4. Identify and assess the role of various FinTech applications.
Professional Skills: Perform effectively within the professional environment.
Work within a team, demonstrating interpersonal skills such as effective
listening, negotiating, persuading and presentation. Be flexible and adaptable
to changes within the professional environment
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Arden University © reserves all rights of copyright and all other intellectual property rights in the learning materials and this publication. No part of any of the learning
materials or this publication may be reproduced, shared (including in private social media groups), stored in a retrieval system or transmitted in any form or means,
including without limitation electronic, mechanical, photocopying, recording or otherwise, without the prior written consent of Arden University. To find out more about
the use and distribution of programme materials please see the Arden Student Terms and Conditions.
Guidance
Your assignment should include: a title page containing your student number, the
module name, the submission deadline and the exact word count of your submitted
document; the appendices if relevant; and a reference list in AU Harvard system(s).
You should address all the elements of the assignment task listed below. Please
note that tutors will use the assessment criteria set out below in assessing your work.
You must not include your name in your submission because Arden University
operates anonymous marking, which means that markers should not be aware of the
identity of the student. However, please do not forget to include your STU number.
Maximum word count: it is expected that your submission should not exceed 3,000
words
Please refer to the full word count policy which can be found in the Student Policies
section here: Arden University | Regulatory Framework
Please note the following:
Students are required to indicate the exact word count on the title page of the
assessment.
The word count includes everything in the main body of the assessment (including in
text citations and references). The word count excludes numerical data in tables,
figures, diagrams, footnotes, reference list and appendices. ALL other printed
words ARE included in the word count.
Please note that exceeding the word count by over 10% will result in a 10-percentage
point deduction.
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Arden University © reserves all rights of copyright and all other intellectual property rights in the learning materials and this publication. No part of any of the learning
materials or this publication may be reproduced, shared (including in private social media groups), stored in a retrieval system or transmitted in any form or means,
including without limitation electronic, mechanical, photocopying, recording or otherwise, without the prior written consent of Arden University. To find out more about
the use and distribution of programme materials please see the Arden Student Terms and Conditions.
Assignment Instructions
Instructions:
This assessment should take you no longer than 3-4 hours and can be
completed at any point during 24-hour window. Please ensure you give
yourself adequate time to upload your completed paper to Turnitin.
For further guidance on the TCA assessment please click on this link:
https://vimeo.com/398870288/2283356462
No formulae sheet is provided, you are expected to access these from
appropriate library sources (if required).
Please turn over for questions
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Arden University © reserves all rights of copyright and all other intellectual property rights in the learning materials and this publication. No part of any of the learning
materials or this publication may be reproduced, shared (including in private social media groups), stored in a retrieval system or transmitted in any form or means,
including without limitation electronic, mechanical, photocopying, recording or otherwise, without the prior written consent of Arden University. To find out more about
the use and distribution of programme materials please see the Arden Student Terms and Conditions.
Questions
All questions are compulsory and relate to the following case study.
TT Ltd.
TT is a large, privately owned supermarket retail group based in the UK. It
has a total of 30 stores throughout the UK. The business is family owned
and was founded by Gene Cooper who has recently stepped down as
chairperson. From 20X3, the business has been run by one of Gene’s
children, Lindsay.
The company has always been debt averse but there is evidence that the
business is being held back by a lack of capital investment, especially in the
key areas of online sales and store layouts. As a result, Lindsay is
considering borrowing £200m to fund the cost of developing an online sales
division (TT has no online sales activity at present). The finance director also
wants to invest in a new double entry bookkeeping system as the current one
has led to misstatements and errors in the financial statements. Lindsay is
not convinced this is an important or beneficial investment, however.
TT are notorious for centralising services and functions, and the company has the
highest operating gearing ratio in the sector. Lindsay wants to continue with this
policy and has plans to centralise more retail store functions which will require
relocating staff to the head office. Many of these relocated staff will be required to
work on the new online sales project. As part of the year X2 audit, TT’s auditors
noticed that the organisation’s incremental budgeting system required managers to
provide very little justification for their budget requests. They also identified
significant budgetary slack in TT.
The following accounting and financial information is available:
Statement of Financial Position: 20X1 and 20X2

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Arden University © reserves all rights of copyright and all other intellectual property rights in the learning materials and this publication. No part of any of the learning
materials or this publication may be reproduced, shared (including in private social media groups), stored in a retrieval system or transmitted in any form or means,
including without limitation electronic, mechanical, photocopying, recording or otherwise, without the prior written consent of Arden University. To find out more about
the use and distribution of programme materials please see the Arden Student Terms and Conditions.

Note total trade creditors are 40 for 20X2 and 42 for 20X1 Profit and Loss
20X1 and X2

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materials or this publication may be reproduced, shared (including in private social media groups), stored in a retrieval system or transmitted in any form or means,
including without limitation electronic, mechanical, photocopying, recording or otherwise, without the prior written consent of Arden University. To find out more about
the use and distribution of programme materials please see the Arden Student Terms and Conditions.

Question 1
Required:
a) Calculate appropriate financial ratios covering TT’s profitability, liquidity,
gearing and efficiency for the years’ X1 and X2.
(16 marks)
b) Comment upon the results of your ratio analysis and TT’s operating
gearing ratio.
(10 marks)
c) Identify some of the key advantages for TT should they choose to invest in
an effective, automated bookkeeping system.
(9 marks)
Give 5 reasons for ratio calculations (5 marks)
(Total: 40 marks)
[LOs: 3,4]
Question 2
As part of the planned expansion into online sales, AAA is considering
investment in several items of IT hard and software. One such item is a
centralised route planning piece of software (for the delivery vans). Lindsay
believes this will lead to increased profitability. There are two possible choices
of software that could be selected; the investment information and estimated
cashflows for each software package is shown below:

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Arden University © reserves all rights of copyright and all other intellectual property rights in the learning materials and this publication. No part of any of the learning
materials or this publication may be reproduced, shared (including in private social media groups), stored in a retrieval system or transmitted in any form or means,
including without limitation electronic, mechanical, photocopying, recording or otherwise, without the prior written consent of Arden University. To find out more about
the use and distribution of programme materials please see the Arden Student Terms and Conditions.
TT has a cost of capital of 10%.
Each piece of software has a useful life of 4 years. The scrap value will be
zero for both.
Required:
a) Calculate the accounting rate of return (average method) for each
software package.
(5 marks)
b) Calculate the payback for each software package.
(5 marks)
c) Calculate the net present value for each software package.
(10 marks)
d) Advise TT as to which software package should be chosen.
(10 marks)
e) Explain how the use of FinTech could be beneficially incorporated into the
online retail sales project.
(10 marks)
(Total 40 marks)
[LOs: 2, 4, 5]
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Arden University © reserves all rights of copyright and all other intellectual property rights in the learning materials and this publication. No part of any of the learning
materials or this publication may be reproduced, shared (including in private social media groups), stored in a retrieval system or transmitted in any form or means,
including without limitation electronic, mechanical, photocopying, recording or otherwise, without the prior written consent of Arden University. To find out more about
the use and distribution of programme materials please see the Arden Student Terms and Conditions.
Question 3
Required:
Draft a briefing note to the chairperson Caroline, which:
a) Discusses the advantages and disadvantages of the different
approaches to budgeting that could be used by TT
(10 marks)
b) Identifies and explains the problems that can be caused by
organisational slack (budgetary slack).
(5 marks)
c) Identifies and briefly discusses some of the main sources of debt
finance that TT could select to fund the new online retail sales project.
(5 marks)
(Total: 20
marks)
[LOs: 1, 2, 5]
End of questions.
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Arden University © reserves all rights of copyright and all other intellectual property rights in the learning materials and this publication. No part of any of the learning
materials or this publication may be reproduced, shared (including in private social media groups), stored in a retrieval system or transmitted in any form or means,
including without limitation electronic, mechanical, photocopying, recording or otherwise, without the prior written consent of Arden University. To find out more about
the use and distribution of programme materials please see the Arden Student Terms and Conditions.
Referencing Guidelines
You MUST underpin your analysis and evaluation of the key issues with appropriate
and wide ranging academic research and ensure this is referenced using the Arden
University (AU) Harvard System.
Follow this link to find the referencing guides for your subject: Arden Library
Atrill, P. and McLaney, E., (2021). Accounting and Finance for Non specialists.
Pearson
Link to Book:
https://bibliu.com/users/saml/SamlArdenUniversity?RelayState=eyJjdXN0b21fbGF1b
mNoX3
VybCI6IiMvdmlldy9ib29rcy85NzgxMjkyMzM0NzIxL2VwdWIvT0VCUFMveGh0bWwv
MDVfQnJ pZWZfQ29udGVudHMuaHRtbCJ9
Submission Guidance
Assignments submitted late will not be accepted and will be marked as a 0%
fail.
Your assessment can be submitted as a single Word (MS Word) or PDF file, or, as
multiple files.
If you chose to submit multiple files, you must name each document as the question/part
you are answering along with your student number ie Q1 Section A STUXXXX. If you
wish to overwrite your submission or one of your submissions, you must ensure
that your new submission is named exactly the same as the previous in order for
the system to overwrite it.
You must ensure that the submitted assignment is all your own work and that all
sources used are correctly attributed. Penalties apply to assignments which show
evidence of academic unfair practice. (See the Student Handbook which is available
on the A-Z key information on iLearn.)
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Arden University © reserves all rights of copyright and all other intellectual property rights in the learning materials and this publication. No part of any of the learning
materials or this publication may be reproduced, shared (including in private social media groups), stored in a retrieval system or transmitted in any form or means,
including without limitation electronic, mechanical, photocopying, recording or otherwise, without the prior written consent of Arden University. To find out more about
the use and distribution of programme materials please see the Arden Student Terms and Conditions.
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[Paper reference]
Assessment Criteria: Level 4

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