Pre-Build Spec — FIN6160 Module 6

Status: Approved — retrospective as-built documentation Generated by: Nexus (Claude Code) Approved by: Fadl Altarzi (LXD) — 2026-04-28 Build version: v2.7 Date: 2026-04-28

---

1. Assessment Identity

• Course: FIN6160 — Corporate Finance
• Module: 6 — Corporate Governance and ESG Integration
• Company: Rolls-Royce plc (RR)
• Version: v2.7 (last updated 2026-04-27)
• Route: /assessments/fin6160/module-6

2. Step Structure

#	Step ID	Label	Type	Lock dependency	showScenario
1	scenario	Company Profile	Read-only overview	None	no
2	capital	Capital Structure	MCQ + written justification	Step 1 complete	yes
3	risk	Risk Assessment	MCQ (3 questions)	Step 2 complete	yes
4	error	Analyst QA	SpotTheError written response (min 20 words)	Step 3 complete	no
5	governance	Governance	MCQ (3 questions)	Step 4 complete	yes
6	brief	Executive Brief	MCQ + written synthesis (min 50 words)	Step 5 complete	yes

3. MCQ Inventory

Step 2 — Capital Structure

• Questions: 1 (select optimal option from 3)
• Categories: Capital structure selection (Option A / B / C)
• CLO targets: CLO-2
• Written justification: 30+ words using five-dimension framework
• Correct answer: Option B (60% debt / 40% equity hybrid — WACC 7.6%, coverage 4.2×)

Step 3 — Risk Assessment

• Questions: 3
• Categories: Market Risk — Interest Rate; Market Risk — FX; Credit Risk — Customer Concentration
• CLO targets: CLO-4
• Correct answers: b (interest rate risk from floating SOFR loan), b (currency forward contracts for EUR/GBP), c (trade credit insurance + 25% AR cap)

Step 5 — Governance Analysis

• Questions: 3
• Categories: Governance Deficit; Applicable Code Provision; Priority Recommendation
• CLO targets: CLO-6
• Correct answers: b (CEO/Chairman creates oversight failure), b (UK Code Principle B — division of responsibilities), b (separate CEO/Chairman before transaction closes)

Step 6 — Executive Brief (MCQ component)

• Questions: 2 (confirm capital structure + confirm governance priority)
• Categories: Capital structure confirmation; Governance priority confirmation
• CLO targets: CLO-2, CLO-6
• Correct answers: B (Option B hybrid), a (CEO/Chairman separation)

4. AI Question

The SpotTheError step (Step 4 — Analyst QA) functions as the AI-assessed open-response question. The junior analyst's WACC comparison chart contains a deliberately truncated Y-axis starting at 7% instead of 0%, making the 2.2 percentage-point spread between Option A (9.8%) and Option B (7.6%) appear approximately 5× larger visually than it actually is relative to the total financing cost base. Learners must identify this specific flaw and explain why it could mislead the CFO. Written response (minimum 20 words) is submitted to the grading API alongside the capital justification and executive brief for AI rubric scoring.

5. Media Elements

• ScenarioOverview chart: Recharts BarChart — WACC by capital structure option (Options A, B, C). Bars coloured amber/green/orange. ReferenceLine at 7.6% labelled "Optimal". Y-axis 0–12%, zero-based. (Chart 1.1)
• ScenarioOverview tables: Financial Highlights table (8 rows: Revenue, EBIT, interest expense, D/E ratio, industry median D/E, credit rating, EUR revenue share, top-3 customer AR share); Capital Structure Options comparison table (6 dimensions × 3 options); Risk Register summary table (5 risks with category, likelihood, impact, note); Governance Overview table (5 governance elements with current state)
• SpotTheError: Recharts BarChart — WACC by option, deliberately flawed. Y-axis domain [7, 10.5] instead of [0, 12], making visual spread ~5× larger than actual 2.2pp difference. (Chart 2.1)
• Other media: Five-Dimension Framework summary panel in CapitalStructure step (5-column grid listing framework dimensions)

6. Industry Context Panel

4-item 2×2 grid in ScenarioOverview, placed between the Capital Structure Options table (the canonical "metrics" element in this assessment — financing options + WACC + coverage + flexibility + signal) and the WACC Comparison Recharts chart. Items are present-tense pressures shaping aerospace-defence capital structure decisions:

1. Aerospace & Defence Capex Cycle — frames why the £150M facility is being financed in the first place
2. UK Corporate Governance Code 2024 — frames the governance recommendation step (FRC Provision 29 + remuneration disclosures)
3. BBB Issuer Bond Market — frames the WACC analysis without altering the math (spread compression + leverage-drift sensitivity)
4. Net-Zero Transition Pressures — frames the strategic flexibility dimension of the five-dimension framework

Updating any panel item must not change the correct answer to any MCQ. WACC math, the optimal-WACC reference line (7.6%), the BBB rating constraint, and the UK Corporate Governance Code / OECD Principles references in governanceProfile remain invariant.

7. Written Brief

Capital Structure Justification (Step 2)

• Prompt: "Justify your recommended capital structure using the five-dimension decision framework (WACC, debt service coverage, credit rating, strategic flexibility, and ESG/governance alignment)."
• Minimum words: 30
• CLO mapping: CLO-2

Analyst QA — Spot the Error (Step 4)

• Prompt: "Identify the visualisation error in the WACC comparison chart and explain why it could mislead the CFO's financing decision."
• Minimum words: 20
• CLO mapping: CLO-4

Executive Brief (Step 6)

• Prompt: "Integrate your capital structure recommendation, primary risk mitigant, and governance priority into a constrained board advisory brief for the Rolls-Royce transaction."
• Minimum words: 50
• CLO mapping: CLO-2, CLO-4, CLO-6

8. Company Profile

• Name: Rolls-Royce plc
• Ticker: RR
• Sector: British engineering — aerospace, defence, and power generation
• Description (as rendered): "Rolls-Royce designs and manufactures advanced power systems for aerospace, defence, and power generation applications. Listed on the London Stock Exchange (RR). The board has approved a £150M East Midlands manufacturing facility subject to financing terms being confirmed."
• Source: docs/simulation-data/global_simulation_company_database.json (entry C0469 — all financial figures are plausible fiction, not real Rolls-Royce data)

9. Grading Configuration

• MCQ weight: 0.70
• Written weight: 0.30
• Degree level: Masters (MBAF)
• Mastery threshold: ≥90% overall; no individual pillar below 80%
• CLO demonstrated threshold: ≥80%
• Pillar weights: Domain 55%, Reasoning 25%, Contribution 20%

Written sections graded via /api/grade with courseCode: "FIN6160", moduleId: "module-6". Three written sections submitted: capital-justification, analyst-qa, executive-brief.

CLO-4 score calculated as: (domain_score × 0.6875) + (reasoning_score × 0.3125)

10. Compliance Checklist

• Step locking (isAccessible) — implemented; QA bypass unlocks all steps
• QA bypass (?qa=nxf-qa-8f2k) — implemented via URLSearchParams
• Ticker pill in header — RR pill rendered in h1 as font-mono badge
• US English spelling — verified throughout
• Warm learner-facing tone — verified (feedback uses "Not quite — let's reconsider that recommendation", "You got X of Y — review... and give it another go!")
• Version string in breadcrumb — v2.0 displayed in monospace in breadcrumb line
• No external logos (no Clearbit) — Nexford logo from /nexford-logo.svg (public/); no company logo
• AI question included — SpotTheError written response submitted to grading API
• Recharts chart in ScenarioOverview — BarChart (WACC comparison, Chart 1.1) using ResponsiveContainer
• SpotTheError component — Step 4, truncated Y-axis [7, 10.5] on WACC BarChart
• Analyst QA step — Step 4 ("Analyst QA"), asks learner to identify chart error
• Back button on every step — explicit ← Back buttons added to all steps except Step 1 (fixed in v2.7 per punch list #31)

---

Approval notes

• Version incremented from v1.0 to v2.0 on 2026-04-23; specific changes not recorded in code.
• assessments.config.ts "Vantara Industrial plc" stale scenario name → corrected to "Rolls-Royce plc" — fixed 2026-04-24.
• CapitalStructure MCQ bug (correct option shown green on wrong submission) → fixed 2026-04-24. Now follows CLAUDE.md MCQ retry model: correct option only turns green after completed state (all-correct submission).