Workshop 2 Task Sheet PDF

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Workshop 2...

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FINM1416 Workshop 2 (6-9 April 2020) Problem You are in the market for a new car. After test driving several models, you have decided to purchase the Tesla Model 3. Including all options and up-front costs, the car will cost you $70,000. You will sell your old hybrid car for $20,000, so you need to borrow $50,000 to purchase the car. As this is a long-term purchase, you will borrow the money for 5 years. You’ve identified the following four lenders: 1. 2. 3. 4.

loans.com.au (https://www.loans.com.au/car-loans/buying-personal-car/green-cars) imb Bank (https://www.imb.com.au/personal-loans-car-loans-new-car-loan.html) St George Bank (https://www.stgeorge.com.au/personal/personal-loans/secured-loan) Westpac (https://www.westpac.com.au/personal-banking/personal-loans/car-loan/?layout=full)

On Blackboard, you will find an item in My Grades called “Workshop2Bank”. Your “grade” for that item is a number between 1 and 4 corresponding to the four banks listed above. For your assigned bank you should:   

Go to the bank’s website and find the current APR for a new 5-year car loan Find the relevant fees for the loan (establishment or application fee plus any monthly fees) Calculate the monthly payment for the loan assuming that you borrow enough to have $50,000 after paying the up-front fees (use the APR, not the comparison rate)

The above items will be submitted via the Workshop 2 Quiz on Blackboard. As part of the quiz you will upload your workings in one of 3 formats: pdf (of handwritten or typed workings); image file (photo of handwritten workings); excel file. You can ignore any government charges (registration, stamp duty) or Personal Property Securities Register (PPS) fees – these will be the same for all four loans and are already included in the total cost above.

Required Before your workshop: Submit the Workshop 2 Quiz on Blackboard. This quiz will be due at 2pm on Monday 6 April. See above for the questions that will be on the quiz. Online workshop: You will be assigned to an online group on Blackboard of about 10 students. Each group will have a discussion board. The groups and discussion boards will be available from 2pm Monday 6 April until 2pm Wednesday 8 April. When you first open the discussion board, you should create or reply to a thread on your assigned bank posting the bank’s APR and fees, along with the file containing your computation of the monthly payment. Each student is expected to post their own workings, even if someone else has already posted the same answer. Where you disagree with someone’s workings, you should politely ask for clarification. The group should create two additional threads – one for financial comparison and one for non-financial factors. In those threads you should brainstorm ideas for your essay. All of your comments and contributions to the discussion board must be completed by 2pm on Wednesday 8 April, at which time the discussion board will be locked. Staff will monitor the groups, adding comments where appropriate, visiting each group once between 6pm Monday and 2pm Tuesday and once between 6pm Tuesday and noon Wednesday (feel free to leave questions for staff as threads in the discussion board). Your work on the discussion board will be marked as part of your workshop grade Note that the groups for this workshop will be different from the groups for Workshop 1. After the workshop: Essay due at 2pm on Thursday 9 April 2020. It is to be submitted on Blackboard. After the workshop, you should submit an individual essay of no more than 500 words addressing the following: 

Explain how you would rank the loans using solely financial criteria making sure you both explain the theory and provide the necessary computations. Then list at least two non-financial criteria you might use in selecting a lender, explaining why they are important. Finally, choose one of the four loans, explaining which criteria were most important to you.

Equations and workings are not included in the word count. You can provide the workings in an appendix (typed or hand-written) and just refer to the numbers in the body of your essay. The non-financial criteria mentioned in the essay are to come from general knowledge. The idea is to acknowledge that money is not the only factor in making this type of decision. We are looking for how you think about decision making. There’s no single right answer – anything that would impact your decision is fine as long as you can reasonably argue that your selected criteria are relevant to choosing a car loan. You can copy your own contributions to the discussion board in your essay. If you found the contributions of other participants useful, you should write these out in your own words. It is not necessary to reference either the discussion board or the course materials. All other sources should be referenced (reference style is not critical, just be consistent).

Marking Your final score for the workshop will be computed out of 100 marks. Your best three workshops will each count for 15% of your final grade. Marks will be allocated as follows: Task Workshop 2 Quiz on Blackboard Online Discussion Board Essay Total

Marks 10 40 50 100...