You are required to write a report for the Board of Directors of Agnew Agricultural Ltd (italicized words in
brackets indicate the approximate word count for each section).
The report should cover the following key areas:
1. An executive summary outlining the key challenges that the company is facing and the main outcomes
from the analysis work you have under taken so far (250-300 words).
2. A critical discussion of the incremental budgeting approach that is currently used at Agnew Agricultural
Ltd with particular emphasis on the following areas:
a. The impact of incremental budgeting on the achievement of the key benefits claimed for
budgets (150-175 words);
b. The potential impact of the use of zero-base budgeting on the achievement of the key benefits
claimed for budgets (150-175 words);
c. A justified recommendation of the approach to budgeting that Agnew Agricultural Ltd should
use in the future (125-150 words).
3. A discussion of the break-even analysis of the proposed new mower (Document 2) including:
a. A review of the risk and return offered by the two manufacturing options with reference to
the concept of operating gearing (250-300 words);
b. A justified recommendation on which option Agnew Agricultural Ltd should choose (100-125
words).
4. A discussion of the reasons for the differences between the net cash flows and the operating profit in
the statements above (Document 3), and in particular why net cash flow remains negative when the
company returns to profit at the end of the six-month period (325-375 words).
5. A discussion of the original and proposed costing methods above (Document 4) with particular
emphasis on the following areas:
a. A critical appraisal of the reasons for the choice of apportionment bases used in both the
original and proposed costing methods (250-300 words);
b. A critical appraisal of the Sales Director’s view that the proposed costing method is superior
because it reduces the overheads chargeable to the Large Machinery profit centre (180-210
words).
6. A critical appraisal of the results of the capital investment appraisal of the Weldmaster and Solderking
(Document 5) with particular emphasis on the following areas:
a. A critical discussion of the advantages and disadvantages of each capital investment appraisal
method (200-250 words);
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Assignment Brief Template Page 10 of 13
b. A discussion of the risk and return presented by the the Weldmaster and Solderking options
and a recommendation as to which option should be chosen, given the lack of investment
capital available to the company (200-250 words).