M004LON Coursework 2 – June 2018

Students are required to submit an individual report before the deadline with a maximum of 2500words based on the following case studyCASE STUDY – LEGO LIMITEDLego plc is a public limited company, whose shares are quoted on the Alternative Investment Marketin London and has been operation in the UK for the past 10 years. Lego Plc is a subsidiary of LEGOgroup of companies South Africa, based in Cape Town. Lego plc provides intellectual property toFinancial services, HR consultants, Marketing companies, Tourist companies, general businesses andinvestment property funds all over the UK. For the past 10 years, Lego plc has been a profit makingfirm as it has retained its previous clients, in addition to capturing an increasing share of the market.However, the Finance director of Lego has recently engaged your firm to help them source Financefor their expansion plans.Your firm is to look at 3 issues regarding this engagement:? The proposed investment in new software? An outline of who Lego management can use tools such as Budgeting and breakeven analysisin their day to day business? The proposed expansion plans of acquiring a company in Europe.The above should be covered in full in your consultancy report to Lego management and board ofdirectors.Details of the two proposed investments are outlined below for your attention.New SoftwareThe current software product that Lego has been selling to companies is now deemed to be outdatedand the company is looking to invest in a new product, and there are two proposals on offer. Thedetails of these two proposals are outlined below.Lego SuperLego super is the first of the two proposals. The expected life of this product is 5 years and its workingcapital requirements and the cost of new software, expected revenue, components cost andoverheads are as below: