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For information and reference only – not to be submitted as your own work. Your institution may prohibit AI and require an Academic Integrity Declaration. Follow its rules and use this extract only to see how a strong answer is structured.

This extract follows a Master’s level business brief with two requirements, each worth 50 marks and answered in about 1,000 words: an investment report for a client with NZ$3 million, and a project plan for an 18-month, $40m industrial factory. Browse similar briefs in our solved assignment questions library, and see the thinking behind the project half in our blog on project risks for a new factory.

Requirement 1: Investment report (extract)

Recommendation

This report compares two ways of investing NZ$3 million: a food business producing high-value fruit ingredients, and a rental property portfolio in Auckland. On the assumptions below, the rental option offers lower, steadier returns with minimal extra funding, while the ingredients business offers higher potential returns, a longer payback and a requirement for further capital. The client should choose according to risk appetite and time horizon, and the report recommends a staged entry into the ingredients business only if the client can accept a payback beyond five years.

Returns, timeframe and additional funds

All figures are illustrative assumptions for modelling; a final report would replace them with quoted market data and cite each source (Damodaran, 2012).

Measure Fruit-ingredients business Auckland rental property
Initial outlay NZ$3.0m (plant, equipment, working capital) NZ$3.0m (about two to three properties, with no borrowing)
Additional funds Assumed NZ$1.0m for scale-up and working capital in years 2–3 Assumed NZ$0.1m for maintenance and compliance reserve
Assumed annual return Net profit margin building from 0% to 15% of revenue by year 4 Net rental yield of about 2.5% plus assumed 3% capital growth
Payback period Approximately 5–7 years Income covers outlay in 25+ years; capital growth drives total return
Liquidity Low: a trade sale is needed Moderate: properties can be sold, with selling costs
Main risk Demand, seasonality, food safety Price falls, tax and regulation changes

The ingredients case rests on revenue. If the business sells freeze-dried or extracted fruit ingredients to food manufacturers, a realistic year-three target should be supported by named customers or letters of intent, not by a market-size headline. Without such evidence, an assessor will see the forecast as unsupported.

The rental case is easier to model, but not risk free. Net yield is the gross rent less rates, insurance, maintenance and management fees, and these costs reduce income considerably. Total return depends mostly on capital growth, which is uncertain. A sensitivity test (for example, a 10% price fall in year three) shows the client the downside before committing.

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Risks and mitigation

Risk Option Likelihood / impact Mitigation
Weak demand or loss of a key customer Ingredients Medium / High Pre-sale contracts; at least three anchor customers before scale-up
Crop supply and seasonality Ingredients High / Medium Multi-grower supply agreements; frozen raw-material buffer
Food safety failure or recall Ingredients Low / High Registered food control plan; product recall insurance
Property price fall Rental Medium / High Hold long term; avoid borrowing; diversify across suburbs
Tax and tenancy law changes Rental Medium / Medium Use a tax adviser; model after-tax return; keep a compliance reserve

Requirement 2: New business project (extract)

Project scope and phases

The project is an 18-month, $40m build of a factory that recovers valuable minerals from recycled electronic goods and employs 25 people once commissioned. Following the PMBOK approach (Project Management Institute [PMI], 2021), the work breakdown structure has five level-one packages: (1) feasibility and design, (2) consents and approvals, (3) funding, (4) construction and installation, and (5) commissioning and market entry.

Phase Months Key deliverable Dependency
Design and process proving 1–6 Detailed design; pilot results Seed funding
Consents and approvals 1–9 Resource consents; hazardous substances approvals Site selected, design freeze
Capital raising 2–8 Financial close on debt and equity Pilot data; consent progress
Construction and installation 8–16 Building and process line complete Consents granted; funds drawn
Commissioning and market entry 15–18 Plant at specification; first sales Offtake agreements

The critical path runs through design, consents, financial close and construction. A one-month consent delay moves the whole start of construction, so consents are scheduled in parallel with design and given the largest contingency.

Risk register

Risk Likelihood Impact Response
Consent delay or conditions (Resource Management Act 1991) Medium High Early engagement with council and iwi; assess the Fast-track Approvals Act 2024 route; consent manager appointed
Hazardous substances and waste handling Medium High Compliance review under the Hazardous Substances and New Organisms Act 1996; independent safety audit
Capital raising shortfall Medium High Mixed funding (bank debt, equity, possible grant); lender conditions mapped; 10% contingency
Feedstock supply of e-waste Medium High Supply contracts with collectors; import controls checked against the Basel Convention (Secretariat of the Basel Convention, 2011)
Selling extracted products to NZ and overseas Medium High Offtake agreements before financial close; price hedging; export documentation plan
Cost and schedule overrun High High Contingency; stage-gate reviews; reference-class forecasting (Flyvbjerg, 2014)

Risk scoring follows the process in ISO 31000 (ISO, 2018): identify, analyse, evaluate and treat, then monitor. Cost overrun is rated high likelihood because large projects frequently exceed budget and schedule (Flyvbjerg, 2014), and this is stated plainly rather than hidden in the contingency line. The ratings are illustrative judgements.

Capital raising and markets

A $40m cost might be funded by, for example, 50% senior debt, 35% equity and 15% other sources. These proportions are an assumption to be tested with a lender. Lenders will usually want consents granted and offtake contracts signed first, which is why those two items sit before financial close on the schedule. For overseas buyers, the plan assigns an export manager and tests price risk against metal price movements.

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About the expert

Reviewed by Dr. Sophie McAllister, Managerial Finance & Business Analytics Specialist, Victoria University of Wellington, New Zealand. Her profile covers MBA finance, including financial performance, investment decisions, budgeting and business analytics.

For wider support, see our finance assignment help and management assignment help pages.

References

Damodaran, A. (2012). Investment valuation: Tools and techniques for determining the value of any asset (3rd ed.). Wiley.

Fast-track Approvals Act 2024 (NZ).

Flyvbjerg, B. (2014). What you should know about megaprojects and why: An overview. Project Management Journal, 45(2), 6–19. https://doi.org/10.1002/pmj.21409

Hazardous Substances and New Organisms Act 1996 (NZ).

ISO. (2018). Risk management – Guidelines (ISO 31000:2018). https://www.iso.org/standard/65694.html

Project Management Institute. (2021). A guide to the project management body of knowledge (PMBOK guide) (7th ed.).

Resource Management Act 1991 (NZ).

Secretariat of the Basel Convention. (2011). Basel Convention on the control of transboundary movements of hazardous wastes and their disposal: Text and annexes. United Nations Environment Programme.

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