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Capital Budgeting and Investment Planning

Capital Budgeting and Investment Planning

Code: ACC2RZ004
Scope: 5 ECTS
Timing: Year 3
Language: English
Level: Professional studies
Type: Obligatory

Learning objectives
The objective is to learn to make long-term financial calculations by using different techniques of investment calculation. The module includes also planning of successful financing of the investment plans and methods to analyse the cost of financing. Excel is utilized when making the calculations.

On successful completion of this course, the student is able to
• make long-term financial budgets
• calculate the cost of financing
• use capital budgeting models
• calculate the value of a company

Contents
• Planning of the financing of investment projects
• Methods to evaluate feasibility of investment plans: Accounting Rate of Return, Payback, Net Present Value, Internal Rate of Return
• Use of Excel functions in capital budgeting
• Methods to valuate businesses

Starting level and linkage with other courses
Financial Accounting

Assessment

Assessment components:
Individual excel assignment
Individual examination

Assessment objects:
Student´s skills to produce investment calculations using methods included in course contents and evaluate the feasibility of planned investments.

The course is evaluated on a scale excellent (5), very good (4), good (3), satisfactory (2), fair (1), fail (0). The assessment criteria is presented on a scale 1 - 3 - 5.

Grade 1
The student masters the essential aspects of investment calculations and related use of Excel spreadsheets with assistance. With given instructions, the student has the ability to perform basic tasks, but needs a lot of guidance.

Grade 3
The student masters the essential aspects of of investment calculations and related use of Excel spreadsheets and related use of Excel spreadsheets. With given instructions, the student will be able to perform basic tasks.

Grade 5
The student masters the essential aspects of investment calculations and related use of Excel spreadsheets independently. The student has the ability to apply the knowledge and skills learned in decision making demanded in management position.

Working life connections
• Students are encouraged to actively present their own thoughts and knowledge from their working experiences
• All the assignments are working life related and based on practical cases
• Visiting speaker from industry

Internationality
Throughout the course international accounting standards will be applied.

Learning methods
The learning goals of this course can be reached in the following ways:

a. Lectures and related assignments as full time studies
b. Participation in a working life project
c. Develop models to include study-time work experience in the studies

Assessing one´s own learning is a compulsory part of the course.

Teacher responsible
Pekka Heikkilä, Haaga

Course materials
Schmidgall, R. 2006 (or later). Hospitality Industry Managerial Accounting. Educational Institute of the American Hotel & Motel Association, USA. Chapters 13 and 10
Lecture materials in Moodle