Microsoft Word - Final Main Assessment BUSN104 All campuses Main XXXXXXXXXXdocx
BUSN104 Money Matters
Alternative Final Assignment
Peter Faber Business School
Brisbane, Melbourne, North Sydney, Strathfield
Semester 1, 2020
Total Marks: 50
Due time and date: XXXXXXXXXXAEST, Friday 5 June via Turnitin.
Submission Instructions: Upload as Microsoft Word Document.
XXXXXXXXXXCopy and paste any Excel tables into the Word document
Do not write the question into your submission.
Clearly label your answers
Source 1: Ramsay Health Care Annual report 2019
Source 2: Yahoo Finance Ramsay Health Care historical share and dividend data
Part A: Financing – 30 marks
Consider the Ramsay Health Care 2019 Annual Report.
a) Does Ramsay Health Care have strategies in place to align manager and shareholder
interests at Ramsay Health Care based on the Annual Report? Provide one
using in-text referencing Harvard Style XXXXXXXXXXmarks)
) Based on Note 7b what type of (non-cu
ent) debt capital is Ramsay Health Care primarily
using to finance its long-term operations? What are the risks and benefits of using this type
of financing? XXXXXXXXXXmarks)
c) Ramsay Health Care reports all its economic activities in monetary terms. In which cu
does Ramsay Health Care report all its transactions? How could exchange rates affect
values in reports and how could this lead to problems when using annual reports as a
predictor for future financial results.
d) How could managers use the annual report figures to measure budget control success?
Consider the Ramsay Health Care Yahoo Finance data.
e) How has Ramsay Health Care’s ability to manage inventory changed from 2018 and 2019?
Show using calculations. Why is managing appropriate inventory a challenge for firms?
f) How would investors feel about the value of their shares in Ramsay, if they purchased shares
on the 30th March 2020? What if they had purchased the shares on 30th October 2019? What
if they were original shareholders? What does that suggest about risks of investing in the
PART B: Decision making – 20 marks
Ramsay Health Care’s NSW division is considering the purchase of two new MRI machines for its
ase hospital in Nowra and has taken quotes from potential suppliers. Each supplier has quoted
the costs to Ramsay on a per-unit basis and the after-tax cash returns per unit from each supplier
are forecast below:
Years Superior Equip Supplies MRI (per unit)
No 1 Medical Supplies MRI
Initial investment Cost: $120,000 Cost: $140,000
1 $40,000 $40,000
2 $42,000 $50,000
3 $50,000 $70,500
• Due to Ramsay Health Care’s excellent credit rating, it has negotiated a cost of financing
the machines at 8% p.a.
• The project manager in Nowra believes that each machine can be sold at the end of three
years to a community clinic for $30,000 and this would be added to the final year’s cash
• Superior Equip Supplies is a global company. No 1 Medical Supplies is a Tasmanian
a. What type of investment decision is Ramsay making? What are some of the reasons why firms
make investment decisions? XXXXXXXXXXmarks)
. In the decision-making process,
iefly explain which generally takes the longest time? (2 marks)
c. Using Excel calculate the Net Present Value of purchasing from each supplier. (Copy your Excel
table and paste it into your final submission. Do not submit the Excel Spreadsheet) (5 marks)
d. Calculate the Payback period of purchasing from each supplier XXXXXXXXXXmarks)
e. Which company should Ramsay Health Care purchase from? Explain your reasons. (3 marks)
f. When making investment decisions, what are some other issues that may influence decision-
END OF ASSESSMENT