QUESTION 3 [25 MARKS]

You are a financial analyst tasked with evaluating investment projects for a company operating under

capital rationing. Discuss the key considerations and challenges you would face while applying project

appraisal techniques in this context. Additionally, provide a detailed comparison of the 'make or buy'

approach for project evaluation, highlighting its relevance in optimizing resource allocation. Support

your response with real-world examples

BBA2_FM_ASG_2023 Regenesys Business School 6

TOPIC POOR

= 0%-24%

ROOM TO

DEVELOP = 25%-

50%

PROFICIENT

= 51%-74%

MASTERLY

= 75-100%

CRITERIA

Understanding

of capital

rationing

The Student displays a

limited understanding of

capital rationing with

significant gaps in

comprehension.

The Student provides

a basic understanding

of capital rationing but

may lack depth or

overlook certain

aspects.

The Student shows a

solid understanding of

capital rationing

principles and its

impact on project

selection.

The Student thoroughly

demonstrates a deep

understanding of capital

rationing concepts,

including its implications

and constraints.

Application of

project appraisal

techniques

The Student attempts to

apply project appraisal

techniques but with

major errors or

inappropriate choices.

The Student utilizes

some project appraisal

techniques but with

inconsistencies or

limited relevance to

the context provided.

The Student effectively

employs relevant

project appraisal

techniques,

showcasing a

competent application

in the given scenario.

The Student skillfully

applies a wide range of

project appraisal

techniques, illustrating a

comprehensive grasp of

their practical

implementation under

capital rationing.

"Make or Buy"

approach

comparison

The Student offers a

superficial or unclear

comparison with minimal

or no real-world

examples provided.

The Student presents

a basic comparison of

the approach with

limited examples,

possibly missing some

key points.

The Student provides

a solid comparison of

the "make or buy"

approach, supported by

relevant examples that

underscore its

significance.

The Student offers a

highly insightful and

detailed comparison of the

"make or buy" approach,

drawing upon real-world

examples to highlight its

importance in decisionmaking.

Critical analysis

and

consideration of

challenges

The Student lists

challenges without a

clear analysis or

provides inadequate

solutions or

recommendations.

The Student identifies

some challenges

without in-depth

analysis or offers

limited solutions

without

comprehensive

insights.

The Student presents a

thoughtful analysis of

challenges, addressing

their implications and

suggesting potential

solutions.

The Student demonstrates

exceptional critical

thinking by thoroughly

analysing challenges

specific to applying project

appraisal techniques

under capital rationing.

Integration of

real-world

examples

The Student uses limited

or tangentially related

examples that do not

contribute significantly to

the discussion.

The Student includes

some relevant

examples, but they

may lack detail or be

loosely connected to

the concepts

discussed.

The Student

incorporates

appropriate real-world

examples that enhance

the discussion and

illustrate key points

effectively.

The Student skillfully

integrates multiple

relevant and detailed realworld

examples to support

arguments and enhance

understanding.