Question 3 (5 marks) Question 4 (3 marks) Air New Zealand and Qantas are two well-known airlines providing flights in the Australian tourism market. They are both listed on the Australian Stock Exchange with Air New Zealand trading under the code AIZ and Qantas trading under the code (QAN). In the table below is an extraction of ratios as at 30 June 2019. 'Overnight Housing' is a not-for-profit enterprise who provide emergency housing for those who find they are without a safe place to stay overnight. They also have a motel with excellent sea views that they are trying to determine whether they should expand and add an additional 10 rooms as their customers cross subsidise their emergency housing service. Any empty motel rooms are also utilised to provide overnight housing. 'Overnight Housing' have performed the calculations and found the following: 2019 Air New Zealand and Qantas Ratio Category Ratio Name Air NZ Qantas Profitability Ratios Method Result Profit Margin (%) ROE (%) ROA (%) 4.67 12.92 4.19 5.12 26.25 Accounting Rate of Return 2.85% 5.49 Payback Period 12-13 years Asset Efficiency Ratios Net Present Value $9,545 positive Days Inventory Days Receivables Days Payables 5.11 27.76 36.91 7.55 20.14 51.23 Liquidity Ratios 0.68 Required (250 words): Current Ratio Quick Ratio 0.49 0.45 0.65 Capital Structure Ratios (Solvency Ratios) 124.32 152.04 Gross Gearing (D/E) (%) Net Interest Cover (interest coverage ratio) a. Explain each method listed above and what it tells the business, determine and list the decision rule that applies for each method (you need to determine a reasonably number) and include one advantage and one disadvantage of each method (do not repeat advantages or disadvantages). 13.06 7.89 Market Performance Ratios PER (Price earnings ratio) 11.34 9.82 b. Review the results individually, compare them with your estimated decision rule, and determine whether you can individually accept the proposed project for each method. c. Draw an overall conclusion as to whether, based on the 3 methods, you would recommend the Required (350 words): project Write a report briefly describing each ratio and which company is performing best based on each ratio. Include an overall conclusion as to which company you would recommend based only on the data you have been provided in this question and justify your selection. NOTE: when providing your answer to part (c) you need to give consideration to the type of business that is being run by 'Overnight Housing'. Question 3 (5 marks) Question 4 (3 marks) Air New Zealand and Qantas are two well-known airlines providing flights in the Australian tourism market. They are both listed on the Australian Stock Exchange with Air New Zealand trading under the code AIZ and Qantas trading under the code (QAN). In the table below is an extraction of ratios as at 30 June 2019. 'Overnight Housing' is a not-for-profit enterprise who provide emergency housing for those who find they are without a safe place to stay overnight. They also have a motel with excellent sea views that they are trying to determine whether they should expand and add an additional 10 rooms as their customers cross subsidise their emergency housing service. Any empty motel rooms are also utilised to provide overnight housing. 'Overnight Housing' have performed the calculations and found the following: 2019 Air New Zealand and Qantas Ratio Category Ratio Name Air NZ Qantas Profitability Ratios Method Result Profit Margin (%) ROE (%) ROA (%) 4.67 12.92 4.19 5.12 26.25 Accounting Rate of Return 2.85% 5.49 Payback Period 12-13 years Asset Efficiency Ratios Net Present Value $9,545 positive Days Inventory Days Receivables Days Payables 5.11 27.76 36.91 7.55 20.14 51.23 Liquidity Ratios 0.68 Required (250 words): Current Ratio Quick Ratio 0.49 0.45 0.65 Capital Structure Ratios (Solvency Ratios) 124.32 152.04 Gross Gearing (D/E) (%) Net Interest Cover (interest coverage ratio) a. Explain each method listed above and what it tells the business, determine and list the decision rule that applies for each method (you need to determine a reasonably number) and include one advantage and one disadvantage of each method (do not repeat advantages or disadvantages). 13.06 7.89 Market Performance Ratios PER (Price earnings ratio) 11.34 9.82 b. Review the results individually, compare them with your estimated decision rule, and determine whether you can individually accept the proposed project for each method. c. Draw an overall conclusion as to whether, based on the 3 methods, you would recommend the Required (350 words): project Write a report briefly describing each ratio and which company is performing best based on each ratio. Include an overall conclusion as to which company you would recommend based only on the data you have been provided in this question and justify your selection. NOTE: when providing your answer to part (c) you need to give consideration to the type of business that is being run by 'Overnight Housing