Question
Case study: You are working in an Accounting, Finance and Business Advisory company as an investment advisor. In this profession you are required to use
Case study:
You are working in an Accounting, Finance and Business Advisory company as an investment advisor. In this profession you are required to use numerous statistical data to advise your clients according to their individual circumstances and preferences.One of your clients (your trainer and assessor) wants to make an investment of $ 1,000,000. The options your client is considering to make the investment are as follow:
a.Making investment in Australian shares
b.Buying a caf for $1,000,000 that will have a turnover of $ 450,000 and net profit of $18%.
c.Buying a household goods retailing store- having turnover of $1.2 million and net profit of 10%.
d.Buying a departmental store having turnover $ 1.8 million and net profit 4%.
Before making investments, your client wants to find out the best option where he can invest his money to get maximum returns.
Consider the following scenarios:
Considering that the client's business will follow the industry trends from September 2017 for all the options, the statistical data are as follow:
Scenario 4: Buying a Departmental store (option d)
In current prices, the trend estimates for Department stores fell 0.5% in 2017 and continues to fall by 1% until the end of 2019 and then there will be a rise by 2.5% per year for next 3 years.
For detailed information on retailed trade statistics in Australia, refer to the link provided below:
http://www.ausstats.abs.gov.au/ausstats/meisubs.nsf/0/3FFBE958D831F1D6CA2581CC000D2200/$File/85010_sep%202017.pdf
Task 4: Make comparison on the results from task (2) and task (3) using appropriate graphs to make comparisons on the results and advise client for the best investment.
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