Internal and External Sources of Finance | Investment Decisions and Appraisal

Question (1):

Evaluate the relative arguments for a firm choosing between internal and external sources of long-term finance. Illustrate your answer with analysis of at least four examples of finance sources; two as internal finance sources and two as external.

Question (2):

Investment decisions and investment appraisal are critical issues to any business, do research and write an essay of 750 words in total, covering the following 3 topics.

1.Critically discuss the nature and importance of investment decision making and why the long-term investment decisions are crucial to businesses.

2.Explain the four major investment appraisal methods with referring to the advantages and disadvantages of each.

3.How to apply each of the four investment appraisal methods to accept or reject a project? What is the acceptance rule of each?

Please read chapter (8) (Making Capital Investment Decisions) on the following link; 

Marking and Feedback:

Marking will be done in accordance with the marking criteria grid below and the University of Portsmouth grading criteria for UG level 5. Marks will be released on 2nd July in line with the 20-working day policy.

Standard level 5 marking criteria applicable to the assessment:

• Excellent work which contains relevant material & shows analysis, originality or creativity of approach and a clear, well- articulated understanding of the subject matter.
• Wide research incorporating up to date, relevant original material. Accurate citation and use of references.
• Excellent with few or no errors in organisation, structure, grammar, spelling, punctuation, use of diagrams & tables.
• Very good work which is clearly written, well-argued and covers the subject matter in a thorough, thoughtful, and competent manner. Contains some originality of approach, insight, or synthesis.
• Good evidence of research and good use of source material. Good use & presentation of references.
• Very good presentation, presentation, organisation, grammar, spelling, punctuation, diagrams, and table
• A very good, well presented piece of work covering much of the subject matter and which is clearly and lucidly written. Good attempt to consider and evaluate the material presented.
• Evidence of research in the topic area and satisfactory use of sources and references.
• Good organisation, structure, use & flow of language, grammar, spelling, format, diagrams, tables et
• Work that demonstrates understanding of the topic area with some attempt to discuss material.
• Evidence of research in the topic area extending beyond key texts.
• Satisfactory presentation &/or use of references/bibliography according to convention.
• A satisfactory attempt to follow directions regarding organisation, structure, use & flow of language, grammar, spelling, format, diagrams, tables etc the majority of students would normally be expected to fall within this range
• Adequate work that attempts to address the topic & demonstrates some understanding of the basic aspects of the subject matter.
• Topic is researched using mainly books & Internet. Attempts to use &/or present references/bibliography according to convention.
• A basic attempt to follow directions regarding organisation, structure, use & flow of language, grammar, spelling, format, diagrams, tables etc
• Work in this range attempts to address the question/problem but is substantially incomplete and deficient. Serious problems with a number of aspects of language use are often found in work in this range and the work may be severely under/over- length and/or fails to grasp the nature of the topic matter. Content, analysis, expression, structure and use of sources will be very weak or missing
• No serious attempt to address the question or problem, and/or manifests a serious misunderstanding of the requirements of the assignment. Acutely deficient in all aspects.