FPC001B Economic and Legal Context for Financial Planning Assignment

Analysis Task Details

• This analysis task covers Topics 1 to 3 and accounts for 20% of your final grade.
• There are three (3) questions in this analysis task. Answer all questions.
• Marks will be awarded for referencing and presentation.
• Your overall mark for this analysis task will be rounded to the nearest whole number.
• Refer to the Criteria-Based Marking Guide for guidelines on what is expected for each question.
• Full workings must be shown for all calculations. Show all calculations in the text of your analysis task and not attached as an appendix. Appendices to the analysis task will not be read.
• Indicative weightings are noted beside each question. Use these weightings to assist you with your allocation of time and resources. The weightings indicate the relative importance of each question.
• State all assumptions used in providing your answer

Policies

• Marks will only be awarded for answers up to the word limit (plus 10%) for each question. Any material written after this will not be counted towards your mark for that question. Headings, quotes and references within the body of the answer are included in the word count. Numerical tables, calculations, and reference lists are not included. For more information on word counts and their rationale, go to Assessment ? Analysis Task ? Assessment Preparation Guide.
• The Assessment Preparation Guide contains information about format and presentation, word limits, citations and referencing, collusion, plagiarism and other policies, useful resources, submitting your analysis task and accessing your results.
• Answers are to be in your own words. Reference and cite all your sources (within the text of your answer) when quoting or using material from external sources. Include a reference list at the end of your analysis task.
• Use of the Harvard referencing style is recommended (as per Kaplan Australia: Harvard Referencing Guide, available from the ‘Referencing and Research’ section of the ‘Build Your Skills’ hub in KapLearn), but the consistent application of any other referencing style will also be accepted.
• Requests for special consideration or information pertaining to special consideration written in the body of the analysis task will not be considered by the assessor. Refer to the ‘special consideration’ section of the Assessment Policy on Kaplan’s website for more information.

Independent research

For some or all questions in this analysis task, you will be required to complete independent research beyond the provided materials. You will also be expected to analyse this research and use it to support your own reasoned conclusions.

This includes:

• consideration of multiple sources beyond topic notes or other provided resources
• sources included are academically sound and credible
• analysing and understanding the argument or information the source presents
• using the material appropriately to directly support your conclusions.

Where significant independent research is required for a given question, it will be clearly indicated in the question instructions and the Criteria-Based Marking Guide.

Analysis Task referencing and presentation (5 marks)

Your analysis task should be presented in a clear and appropriate format, with all sources correctly referenced and cited.

You are required to:

• structure a clear response to each question, using headings if required
• number questions (including sub-questions) and pages
• use correct font style and size
• ensure tables or graphs are clearly labelled and readable
• clearly set out calculations or workings, where they are required
• adhere to the analysis task word limit
• cite sources and provide a reference list at the end of your analysis task. It is recommended to use Kaplan Professional’s preferred referencing style, Harvard (see Kaplan Australia: Harvard Referencing Guide, available from the ‘Build Your Skills’ hub in KapLearn), but the consistent application of any other referencing style will also be accepted.

Case study

Kate (aged 32) and Emily (aged 31) are sisters. Kate works full-time as a nurse and Emily works in IT as a contractor, specialising in project management. Kate has been working for 10 years. Five years ago, she purchased a two-bedroom unit for $520,000, borrowing $400,000 to complete the purchase.

She now has $60,000 in a mortgage offset account.

Emily was a full-time student and completed a double degree and then her master’s degree and has now been working for the past three years. She started contracting in an attempt to find her ideal organisation; however, she hasn’t had much success. She does, however, enjoy regular work and has set herself up with a company as a program lead where she is earning at least $150,000 a year.

Both sisters are single with no dependants. During the COVID-19 lockdowns, Kate asked Emily to move in with her for company. Emily pays $100 per week as rent and half the bills and outgoings. Emily has saved $30,000 since moving in and Kate has used Emily’s rent to pay for redecorating.

Kate has often complained to Emily about how poorly the rosters are put together at the hospital and that there is never enough staff during peak demands, although Kate thinks the demands are relatively predictable: Saturday afternoons = sports injuries; Friday and Saturday nights = alcohol-related injuries; and weekdays in winter = children with various respiratory illnesses.

Emily developed a program that will monitor bed usage and patient demand from entry point into the hospital system through to exit points, linking staffing needs for each part of the hospitalisation.

She shows it to Kate, who uses her medical knowledge to streamline the processes and to enhance timing and the number of days per stay for the various illnesses. Kate gets the opportunity to show the program to the CEO at her hospital. The CEO is very interested and can see a company-wide application of the program, for all the services and employees at the group’s hospitals in Australia, New Zealand, Hong Kong and Singapore. The CEO encourages Kate to go home and develop it into a hospital-wide resource.

Kate and Emily’s uncle Tom heard about the program during a family zoom catch-up. Tom makes a living from gambling and has had a significant windfall from Bitcoin trading. He offers Emily and Kate $100,000 so they can both stop work for six months and focus on the program. Before he finalises the offer, he wants them to show him a five-year business plan. If they can convince him, he will sell some of his Bitcoin holdings to raise the $100,000.

Analysis Task

There are three (3) short-answer questions in this analysis task. Answer all questions.

Question 1. Impact of economic variables and government policies (25 marks/word limit:1,000 words)

Emily and Kate have requested a meeting so that they can have a better understanding of key macroeconomic factors, and, how they relate to their present business situation as per the case study.

The following are the three (3) macroeconomic issue that Emily and Kate would like to understand:

• What is a business cycle and at what stage the Australian economy presently sits in the cycle.
• What is inflation and what is the outlook in the economy for inflation.
• What is ‘wage growth’. This is a major area they want to be aware due to the growth potential they believe their business has.

To help explain these issues to Emily and Kate, the assignment question has been divided into three (3) parts for a total of 25 marks. Your responses must be supported by strong economic arguments and independent research.

Part 1—Three (3) macroeconomic factors

• What is the business cycle and where you believe the Australian economy presently sits in the cycle. (3 marks)
• What is inflation and how it is measured. In your response, include a discussion of inflation in terms of the current economic environment. (3 marks)
• What is wages growth in the Australian economy. Discuss previous trends, its present levels in the current environment and the direction you believe it is now heading. (3 marks)

Part 2—Australian macroeconomic policies

• Briefly explain the role of the RBA in the Australian economy. Identify and discuss relevant recent changes to Monetary Policy that would have an impact on each of the three (3) macroeconomic factors:
  • the business cycle
  • inflation
  • wages Growth
  
  Response needs to focus on how the current monetary policy change influences the particular macroeconomic factor. Supporting independent research is required. (3.5 marks)
• Explain Fiscal Policy in the Australian economy. Identify and discuss relevant recent changes to Fiscal Policy that would have an impact on each of the three macroeconomic issues factors mentioned above. Response needs to focus on how the current fiscal policy change influences the macroeconomic factor. Supporting independent research is required. (3.5 marks)

Note:

• When identifying the changes to either monetary of fiscal policy, your research must ensure the change(s) identified has some impact on the macroeconomic factors mentioned and is clearly explained in your response.
• There is no restriction in using an identified macroeconomic policy change more than once; however, response must ensure it has demonstrated some impact to the macroeconomic factor.

Part 3—the impacts of macroeconomic factors to Emily and Kate’s business

Discuss and explain how the following macroeconomic would have an impact on Emily and Kate’s business, particularly in the future growth of their business:

• The business cycle. (3 marks)
• Inflation. (3 marks)
• Wages growth. (3 marks)

Note: A good response would look carefully at the type of product being offered and the industry it is in.

Question2. Forcasting (10 marks/word limit: 400 words)

Any assumptions you make need to be relevant to Emily and Kate’s situation and to your answer.

Emily and Kate have been researching economic forecasts and are trying to predict if one particular economic variable leads to an increase in demand for hospital services. They are frustrated by economic forecasts from the professionals and are finding the forecasts to be a bit ‘hit-and-miss’.

Note: You are required to undertake independent research to answer the following questions.

1. Explain to Emily and Kate the impact of economic forecasting on asset prices. (5 marks)
2. Select a relevant economic variable that can be forecast and describe how changes in the variable may impact on their planned overseas expansion to New Zealand, Hong Kong and Singapore. (5 marks)

Question 3. Negligience (5 marks/ word limit: 200 words)

Note: You are required to undertake independent research to answer the following question. Emily and Kate are concerned about the impact of their software failing and being personally responsible for any impact of that failure. They have heard of negligence and ask you to explain to them how the hospital could prove they have been negligent.

You must answer this question with reference to the planned business. Any assumptions you use must be relevant to Emily and Kate’s situation, and to your answer.

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