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, graded mark
• Work requirements, mandatory assignment that must be passed in order for the student to take the written examination

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