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2014/2015  BA-BHAAI1010U  Fundamentals of finance

English Title
Fundamentals of finance

Course information

Language English
Course ECTS 7.5 ECTS
Type Elective
Level Bachelor
Duration Summer
Course period Summer
Timetable Course schedule will be posted at calendar.cbs.dk
Study board
Study Board for BSc in Economics and Business Administration
Course coordinator
  • Course instructor - Dr. Gizelle Perretti, Florida Gulf Coast University
    Patricia Plackett - MPP
Main academic disciplines
  • Finance
  • Management
  • Financial and management accounting
  • Economics, macro economics and managerial economics
Last updated on 02-07-2014
Learning objectives
At the end of the course, students should be able to:
  • Utilize financial accounting data to assess the financial health and direction of a firm.
  • Apply time value of money techniques to make multi-period investment decisions and security valuations.
  • Use statistical analysis to quantify risk and return in uncertain economic environments.
  • Forecast cash flows and apply capital budgeting decision techniques to make capital investment decisions.
Course prerequisites
Students must have completed and received passing grades in undergraduate economics and statistics before enrolling in this course. It is highly recommended that students should have completed and received a passing grade in accounting.
Prerequisites for registering for the exam
Number of mandatory activities: 1
Compulsory assignments (assessed approved/not approved)
Mandatory Mid-term Assignment: Students will complete a 50 multiple-choice question take-home quiz that will draw from content presented during the first four class meetings. The take- home quiz must be completed prior to Class 5.
4 hours written exam:
Exam ECTS 7,5
Examination form Written sit-in exam
Individual or group exam Individual
Assignment type Written assignment
Duration 4 hours
Grading scale 7-step scale
Examiner(s) Internal examiner and second internal examiner
Exam period Summer Term
Aids allowed to bring to the exam Limited aids, see the list below and the exam plan/guidelines for further information:
  • Allowed calculators
  • Allowed dictionaries
Make-up exam/re-exam
Same examination form as the ordinary exam
If the number of registered candidates for the make-up examination/re-take examination warrants that it may most appropriately be held as an oral examination, the programme office will inform the students that the make-up examination/re-take examination will be held as an oral examination instead.
Description of the exam procedure
Extra note about help aids - Financial Calculator (TI BAII Plus is recommended). It is not allowed to save text in calculators as notes are not allowed in this exam
Course content and structure

The main goal of a firm is to maximize value for the firm’s owners.  Value is maximized through decisions made by firm managers.  This course is designed to introduce students with a limited background in business to the role of finance in making decisions.  Finance answers three important decision-making questions: 1) What long-term investments should be made, 2) How will we fund those investments, and 3) How will everyday financial activities be managed?
Making financial decisions involves a thorough understanding of the development and use of financial statements (Accounting) as well as the impact of the state of the economy on the decision making process (Micro- and Macro Economics).  Further, financial decision making requires the analytical skills (Math & Statistics) needed to quantify the risk and return parameters used in the process.
The course is organized into three sections.  Section 1 introduces students to financial statements and financial statement analysis.  Managing everyday financial activities is also covered in this section.  Section 2 introduces the concept of time value of money.  Students are presented with tools to value financial assets and macroeconomic conditions that influence the value of those assets. The course demonstrates how these financial assets are issued by firms to fund assets.  Section 3 allows the students to apply the concepts and tools they’ve learned to make capital budgeting decisions.
There is a Preliminary Assignment and Mid-term Assignment in this course. For the Preliminary Assignment students are required to view eight short videos on relevant topics and read several text sections in preparation for working in groups after Class 1 on a peer group ratio exercise that is to be completed before Class 3. The Mandatory Mid-term Assignment will consist of a 50 multiple-choice question take-home quiz that will draw from content presented during the first four class meetings.

Class Schedule

Class Topic
Class 1 Ch. 1: An Overview of Managerial Finance
Ch. 3: The Financial Environment
Class 2 Ch. 2: Analysis of Financial Statements
Ch. 14: Working Capital Management
Class 3 Preliminary Assignment: Team Ratio Analysis
Ch. 14: Working Capital Management
Ch. 4: Time Value of Money
Class 4 Ch. 5: The Cost of Money
Class 5 Mandatory Mid-term Assignment Due
Ch. 6: Bonds
Class 6 Ch. 7: Stocks
Class 7 Ch. 8: Risk and Rates of Return
Class 8 Ch. 9: Capital Budgeting Techniques
Class 9 Ch. 10: Project Cash Flows and Risk
Class 10 Ch. 11: The Cost of Capital
Class 11 Comprehensive Review
Teaching methods
Class sections will primarily consist of lectures along with in-class exercises and discussions.
Further Information
Preliminary Assignment: To help students get maximum value from ISUP courses, instructors provide a reading or a small number of readings or video clips to be read or viewed before the start of classes with a related task scheduled for class 3 in order to 'jump-start' the learning process.
Expected literature

The required textbook for this course is CFIN3 (with CourseMate Printed Access Card), 3rd Edition, Scott Besley; Eugene F. Brigham (ISBN-10: 1133626408) (ISBN-13: 9781133626404). Publisher: Cengage Learning. Copyright: 2015.

Last updated on 02-07-2014