BUSINESS 114 Assignment 1

(NZT) Assignment 1 will be marked out of 50 marks and is worth 10% of your final grade.

Overall Presentation

Submission

Assignment 1 is completed within Canvas and must be submitted by 11:59 pm on 27 March 2026 (NZT). The assessment is in the Assignments section of Canvas. You are responsible for ensuring that your work is submitted successfully before the due date. No Word or PDF document upload is required for this assignment. If you experience technical difficulties, you should follow the course guidance for technical issues and ensure that any problems are reported promptly.

Answer Format

Answers must be entered directly into Canvas in the format specified within each question. Numerical responses should be entered clearly and accurately, following any instructions provided (for example, rounding to two decimal places where required). Some questions are automatically marked, while others require brief written responses.

Written responses should be expressed clearly, set out logically, and remain relevant to the question. Bullet point answers are acceptable only if the whole sentence makes sense. The structure and size of response areas in Canvas are designed to provide sufficient space to answer each question.

Disciplinary knowledge

The purpose of this assignment is to be able to demonstrate an understanding of the material covered in Modules 1 to 3 and apply appropriate methods to solve problems and explain the impact of events on business activity.

Solution seeking

For any calculation-type questions, you should apply appropriate problem-solving processes systematically. Where workings are requested, they should be shown clearly in the response area provided, as marks may be awarded for partially correct reasoning. This is good preparation for similar expectations in course assessments and examinations.

Written Communication

A high standard of written expression and presentation is expected. Correct spelling and grammar are essential. Responses should be concise, structured in a logical order, and relevant to the question. Consider using the resources of the Learning Hub for additional support. https://www.learninghub.ac.nz/writing/paraphrasing-summarising-and-techniques/

Referencing

APA referencing is to be used where necessary. You do not need to reference the assignment question or any references provided within the question. However, you must reference any text that has been quoted or paraphrased. Always answer the questions in your own words. (See the library course page for details on how to use APA referencing).

Refer to: Referencing | Learning essentials

If references are required, they should be included at the end of the relevant question within Canvas. Any references provided in this way will not be included in the word count.

BUS114 Assignment 1 Questions

Question 1: Budgeting (20 marks)

HarbourView Event Services Ltd is an Auckland-based specialist providing high-end event equipment (marquees, lighting, and sound) for corporate and private functions.

The business is entering its peak season for 2026. Emma Chen (Operations Manager) and Luca Patel (Finance Officer) are finalising the Quarter Two budgets to ensure the company can meet its financial obligations while handling high demand.

Service and Revenue Data

HarbourView offers three service tiers. Due to the high value of these events, many clients do not pay fully upfront.

• Payment Mix: 60% of monthly revenues are cash sales, while the other 40% are credit sales.
• Credit Terms: For credit sales:
  • 60% is collected in the month of the booking. o 35% is collected in the following month.
  • 5% is expected to be uncollectible (i.e., they are bad debts).

Staffing and Consumables Costs

HarbourView incurs staffing and consumable costs in Quarter Two. All labour and consumable costs are paid in the month incurred.

Labour costs are incurred per booking as follows:

Consumables (including fuel, cleaning materials, packaging supplies, and minor equipment items) are budgeted based on historical data.

During Quarter Two of the previous year, total consumables cost was $24,800. Due to expected higher activity levels and increases in supplier prices, consumables for Quarter Two 2026 are expected to be 10% higher than last year’s Quarter Two total.

Other Monthly Operational Expenses & Cash Information

• Fixed Expenses paid in each month: Salaries ($9,200), Warehouse Rent ($6,500), and Utilities ($3,100).
• Marketing Expenses paid: April ($2,600), May ($3,000), June ($2,400).
• One-off Item: Annual Public Liability Insurance ($4,800) is due and paid in full in May.
• Financing: The owner will inject $12,000 cash into the business in April.
• Opening Balance: Cash at bank on 1 April 2026 is $8,000.

Required:

To answer Question 1 in Canvas, you will need to prepare the relevant Quarter Two (April–June 2026) budgets, as each part builds on earlier calculations. You may also be required to use these budgets to demonstrate your workings where indicated.

(a) Calculate the total sales revenue for April, May, and June, and the total sales revenue for Quarter Two (April–June 2026). Enter each value in whole dollars and do not use commas. For example, if your answer is $12,345 then type 12345.

(4 marks)

(b) Expected Cash Collections

i. Calculate the expected cash collections from cash sales for April, May, and June, and the total for Quarter Two (April–June 2026). Enter each value in whole dollars and do not use commas.

(1 mark)

ii. Calculate the expected cash collections from credit sales for April, May, and June, and the total for Quarter Two (April–June 2026). Enter each value in whole dollars and do not use commas.

Note: You will need to show these workings in Q1(b)(iii).

(4 marks)

iii.  Show your workings for the expected cash collections from credit sales for Q1(b)(ii). Clearly demonstrate how you applied the credit terms.

 (1 mark)

(c) Staffing and Consumables Cost Budget – Calculate the Total Labour Cost and Total Consumables Cost for Quarter Two (April – June 2026). How much will be paid in total in Quarter Two for Labour and Consumables costs? Enter each value in whole dollars and do not use commas.

(3 marks)

(d) Other Operating Expenses Budget – Calculate the Total Other Operating Expenses for Quarter Two (April–June 2026). Enter each value in whole dollars and do not use commas.

  (1 mark)

(e) Cash Budget for Quarter Two

i. Using the information from parts (a) to (d) of this question, prepare the Cash Budget for Quarter Two (April–June 2026) by showing the following amounts:

• Total Cash Received for Quarter Two.
• Total Cash Payments for Quarter Two.
• Net Cash Increase (Decrease) for Quarter Two.
• Opening Cash Balance for Quarter Two.
• Closing Cash Balance for Quarter Two.

Enter each value in whole dollars and do not use commas.

(5 marks)

ii. Based on your cash budget prepared above, select ALL statements that are correct.

☐ HarbourView reports a net positive cash movement for Quarter Two.

☐ The owner’s capital contribution increases total cash available during the quarter. ☐ The annual insurance payment in May reduces the cash balance for that month but does not cause a cash deficit for the quarter.

☐ HarbourView’s total cash outflows for the quarter exceed its total cash inflows.

☐ HarbourView generates sufficient cash during the quarter to cover its staffing and other operating payments.

☐ The closing cash balance at 30 June 2026 is lower than the opening cash balance at 1 April 2026.

☐ The business cannot meet its short-term obligations.

(1 mark)

(Total for Question 1: 20 marks)

Question 2 Professional Email and AI Reflection (10 marks)

Strategic Communication: Quarterly Cash Review

GreenSprout Organics Ltd is a New Zealand-based company that manufactures and distributes premium organic snack products to supermarkets and independent retailers.

The company has completed its cash budget for the three months ended 30 September 2026.

It is now 5 October 2026, and as the Finance Manager, you are tasked with delivering a formal quarterly review to the Managing Director, Daniel Cho. He has requested a written update on the company’s short-term cash position and any potential risks identified from the cash budget.

Cash Budget Summary (Quarter Ended 30 September 2026)

Monthly Net Cash Movement

Additional Information

 Required:

In Question 2, AI tools may be used to assist in drafting the professional email in part (a). You will then reflect on your approach in part (b). Any AI-generated content must be critically reviewed and adapted to ensure it is accurate, appropriate, and fully aligned with the data provided.

(a) Professional Email 

Write a professional email (maximum 450 words) from you (Finance Manager) to Daniel Cho (Managing Director).

Your email must be structured under the following headings:

1. Cash Position Overview
2. Impact of Credit Policy on Liquidity
3. Impact of Packaging Machine Purchase
4. Recommendations Your email must:

• Refer explicitly to at least three specific numerical figures from the data provided.
• Identify at least one quantified strength and one quantified risk.
• Evaluate the company’s liquidity position, including reference to the minimum desired cash buffer.
• Analyse how the credit policy affects the timing of cash inflows.
• Explain the short-term cash impact of the packaging machine purchase.
• Recommend two practical actions to strengthen future cash flow and justify them using only the information provided.
• Not introduce assumptions that are not supported by the data above.

Your response will be assessed on:

• Accuracy of financial interpretation.
• Depth and quality of analysis.
• Logical structure and clarity.
• Professional tone and layout.

(8 marks)

(b) Responsible Use of AI 

In no more than 150 words, explain:

• Whether and how you used AI in preparing your email.
• What changes you made to ensure accuracy and professionalism.
• How you ensured your financial interpretation was correct.

If you did not use AI, briefly explain how you approached the task independently.

(2 marks)

(Total for Question 2: 10 marks)

Question 3: Time Value of Money – Equipment Upgrade Decision (12 marks)

As demand for large corporate events increases, HarbourView Event Services Ltd is considering upgrading their lighting equipment to improve service quality and reduce reliance on external suppliers. The upgraded lighting system has a current purchase price of $180,000 and is expected to be used for many years.

HarbourView uses 6% per annum (compounded annually) as the relevant time value of money rate when comparing alternatives.

• Option 1: HarbourView purchases the equipment immediately and receives a 4% discount for upfront payment.
• Option 2: HarbourView finances the full purchase price through five equal annual payments, with the first payment made at the end of Year 1. The supplier’s finance rate is 6% per annum. Option 3: HarbourView delays the purchase for 4 years. During this time, HarbourView invests $180,000 at 6% per annum, compounded annually. At the end of Year 4, the equipment price is expected to increase by 10%, and HarbourView will also incur an additional $15,000 installation cost at that time.

Required:

In Question 3, calculations must be clearly shown where indicated and presented in accordance with the rounding requirements specified in each part. The Interest Factor Tables have been provided in the assignment on Canvas.

(a) Option 1

i. Calculate the cash amount paid today under Option 1. Round the final answer to two decimal places. Do not use the dollar sign. Note: You will need to show these workings in Q3(a)(ii).

ii. Show your calculations for Q3(a)(i).

(2 marks)

(b) Option 2

i. Calculate the equal annual payments required under Option 2. Round the factor to four decimal places, and round the final answer to two decimal places. Do not use the dollar sign. Note: You will need to show these workings in Q3(b)(ii).

ii. Show your calculations for Q3(b)(i).

iii. Conceptual Understanding

Which of the following best explains why the total cash paid under Option 2 differs from the present value of the payments?

A. The total cash paid equals $180,000 because the finance rate and HarbourView’s required rate are both 6%.

B. The total cash paid exceeds $180,000 because interest is included in the instalments, but when discounted at 6%, the present value of those payments equals $180,000.

C. The present value of the payments will exceed $180,000 because the instalments include interest.

D. The total cash paid is lower than $180,000 because payments are spread over five years.

(3 marks)

(c) Option 3

i. Determine the investment value after 4 years. Round the factor to four decimal places, and round the final answer to two decimal places. Do not use the dollar sign.

ii. Calculate the total upgraded equipment cost after 4 years. Round the final answer to two decimal places. Do not use the dollar sign.

iii. State whether it is True or False: HarbourView will have a surplus at the end of year 4.

(3 marks)

(d) Evaluation

i. Based on your calculations in parts (a)–(c), identify the financially most attractive option. Support your answer by referring to relevant calculated amounts. Include at least one calculated dollar amount.

(2 marks, max 200 words)

ii. Explain whether the option identified in (d)(i) should automatically be chosen. In your answer, refer to one practical business consideration that may influence the final decision (for example, risk, flexibility, or operational impact).

( 2 marks, max 200 words)

(Total for Question 3: 12 marks) 

Question 4: Time Value of Money – Savings Strategy (8 marks)

HarbourView plans to open a second warehouse in exactly 5 years to support future growth. The estimated setup cost at that time is $350,000. The business currently has $80,000 set aside in a highinterest savings account earning 4% per annum, compounded quarterly. In addition, HarbourView plans to make regular fixed quarterly contributions into the savings account, starting at the end of the first quarter, to reach the target amount.

Required:

In Question 4, calculations must be clearly shown where indicated and presented in accordance with the rounding requirements specified in each part. The Interest Factor Tables have been provided in the assignment on Canvas.

(a) Existing Amount

i. Determine how much the existing $80,000 will amount to at the end of 5 years. Round the factor to four decimal places, and round the final answer to two decimal places. Do not use the dollar sign. Note: You will need to show these workings in Q4(a)(ii).

(1 mark)

ii. Show your calculations for Q4(a)(i).

(1 mark)

(b) Quarterly Contributions

i. Calculate the fixed quarterly contribution required so that HarbourView will have $350,000 at the end of 5 years. Round the factor to three decimal places, and round the final answer to two decimal places. Do not use the dollar sign. Note: You will need to show these workings in Q4(b)(ii).

(1 mark)

ii. Show your calculations for Q4(b)(i).

(2 marks)

iii. Calculate the total cash contributed over the 5 years. Round to two decimal places.

(1 mark)

(c) Impact and Alternative Strategy

After 2 years, HarbourView becomes concerned about committing to fixed quarterly contributions and considers reducing or pausing them.

Using your results from parts (a) and (b), explain one financial consequence of reducing or stopping the contributions at that point. Then evaluate one alternative approach HarbourView could consider to still reach the $350,000 goal. Your answer must refer to at least one calculated dollar amount and discuss both one benefit and one risk of the alternative approach.

(2 marks, max 200 words)

(Total for Question 4: 8 marks)