Learning outcome

After successfully completing the course, the candidate will have achieved the following learning outcomes defined in terms of knowledge, skills and general competence.

The candidate can:

- Prepare decision-relevant cash flow projections for typical investment projects

- Prepare decision-relevant cash flow projections for typical financing projects, including leasing

- Perform all basic interest calculations, including present value, future value, annuities, amortisation of loans, etc.

- Calculate the effective interest rate for various financing options

- Compute the net present value (NPV) and the internal rate of return (IRR) for projects, and know how the NPV and IRR can be used as decision-making criteria

- Find the rate of return for investments with various risk profiles

- Understand basic financial theory, including the relationship between leverage, risk and rate of return

Course Description

The following topics will be covered:

- Basic principles of investment and finance

- Calculation of decision-relevant cash flow, including the impact of working capital

- Correct value assessment methods

- Interest calculation/financial mathematics

- Investment analysis, economic life and replacement analysis

- Taxes and inflation: impact on cash flows

- Risk assessment, portfolio theory and the capital value model

- Return on assets and equity, financial leverage, etc.

- Financing sources and options, including bank loans, bonds, leasing, hire purchase, etc.

Teaching and Learning Methods

3-4 hours of lectures per week during the autumn semester.

Assessment Methods

Written examination, 4 hours.

Minor adjustments may occur during the academic year, subject to the decision of the Dean