ECF1120D: Finance

---

AUSTRALIAN COLLEGE OF BUSINESS AND TECHNOLOGY ECF1120D – FINANCE I UNIT OUTLINE DESCRIPTION: Welcome to Finance I!! This unit will provide you with an opportunity to learn the fundamental principles of corporate and investment finance. Finance is an interesting and exciting area of study, which is rapidly changing and evolving. The financial markets are constantly innovating products to keep pace with the rapid expansion and globalization of the world’s economies. The effects of problems in the financial markets have been felt throughout the world over the last 48 months. These problems have resulted in massive changes in the structure, participants and regulation of the finance industry. Not understanding the impact of these changes could have a dire consequence for any business or individual who has dealings with financial institutions. In the past a number of students who have majored in Finance have stated that this first Finance unit was the most difficult of all the units in their Finance major. Much of this has to do with the fact that it is the first time students are exposed to the jargon, terminology and concepts. Whilst an understanding of a range of mathematical calculations is important in your study of finance, understanding the principles conceptually is equally essential. However, to gain this understanding you will need to constantly practice so that you gain a full understanding of the material. Choosing a mobile phone contract, credit card, car/housing loan, taking advantage of a nomoney down pay nothing until 2015, or changing your superannuation investment options is all financial decisions. Through the principles and methods developed in the unit you will be in a position to make more informed financial decisions. You will find that this unit has a very practical real world approach. To start you will work through the basics of financial maths and the time value of money. This will lead to valuing financial assets such as bonds and shares. You will also learn how a financial manager evaluates a project with consideration of the cost of funding the project and its taxation implications, and evaluation of investment risk.

Prepared by Neville Ruwanpathirana Jan 2018

Page 1 of 4

Quality Assured by ECC

There are many interesting, rewarding and exciting careers in the area of finance. Although this unit is only the beginning, it provides a base on which you can build a future in finance. If you are interested in studying finance as a major, or if you want to talk about career opportunities in finance, don’t hesitate to discuss this with your lecturer. We hope you enjoy the unit. LEARNING OUTCOMES: On completion of this unit students should be able to: 

Apply the knowledge of time value of money to multiple cash flows.



Identify the ways that the firm and the government use short-term and long-term debt as a source of funds.



Determine the financial value of bonds and commercial bills.



Apply no growth models and Gordon growth models to estimate the value of shares.



Calculate expected returns and quantify risk as the variation of these returns



Apply the concept of WACC for the firm’s discount rate



Calculate the WACC by taking into consideration taxation



Identify and apply the different investment evaluation techniques.



Apply the concepts of capital structure and dividend payout policy.

UNIT CONTENT: 

Time value for money



Asset valuations: Debt versus Equity



Risk and Return



Weighted Average Cost of Capital



Capital Budgeting



Capital Structure and Dividend Payout Policy Prepared by Neville Ruwanpathirana Jan 2018

Page 2 of 4

Quality Assured by ECC

TEACHING AND LEARNING PROCESSES: Students attend one session per week with a two-hour lecture/seminar, one-hour tutorial and one-hour workshop. Lectures are used to introduce main concepts and to guide students through important points. Tutorials/workshops are used to assist students in the application of concepts presented in lectures through problem solving exercises and class discussions. Assignment provides students with the opportunity to develop selected theses of the unit through individual research and critique. Mini tests during lectures will help students with their constant revision of the contents covered during the semester. ASSESSMENT: Assessment

Date (due)

Marks/Weighting

Test 1

Week 6

15%

Test 2

Week 10

15%

Assignment

Week 11

20%

To be advised

50%

Final Examination

Please note that it is a unit requirement that you pass the examination to pass the unit.

In line with the ECC Moderation Policy, the ECC Unit Coordinator may scale student marks up or down. Marks awarded are therefore provisional, and the student’s final grade will be subject to approval by the Board of Examiners. See: Moderation Policy and the Assessment Policy at www.pibt.wa.edu.au/policies

Prepared by Neville Ruwanpathirana Jan 2018

Page 3 of 4

Quality Assured by ECC

Disability Standards for Education (Commonwealth 2005) For the purposes of considering a request for Reasonable Adjustments under the Disability Standards for Education (Commonwealth 2005), inherent requirements for this subject are articulated in the Unit Description, Learning Outcomes, Graduate Attributes and Assessment Requirements of this entry. ECC will provide support (within the limits of reasonable adjustment) to those with special requirements. For further information regarding support for students with disabilities or medical conditions please contact the Student Counsellor.

Prepared by Neville Ruwanpathirana Jan 2018

Page 4 of 4

Quality Assured by ECC