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  3. Principles of Finance

Principles of Finance (FNCE10002)

Undergraduate level 1Points: 12.5On Campus (Parkville)

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Overview

Year of offer2018
Subject levelUndergraduate Level 1
Subject codeFNCE10002
Campus
Parkville
Availability(Quotas apply)
Summer Term
Semester 1
Semester 2
FeesSubject EFTSL, Level, Discipline & Census Date

This subject introduces students to the key concepts of finance. Topics include: time-value-of-money, risk and return, present value, capital budgeting, diversification, asset allocation, capital asset pricing model, leverage, risk management and the types and sources of financing. This subject is the first in the sequence of finance subjects offered within the faculty and has a coverage and treatment of material which is suitable not only for students wishing to pursue further studies in finance but also for students from other disciplines who are interested in a single course in finance.

Intended learning outcomes

On successful completion of this subject students should be able to:

  • Use financial mathematics to solve basic financial problems
  • Apply alternative capital budgeting techniques for project evaluation purposes
  • Explain the role of risk and return in the asset allocation decision and the pricing of risky assets
  • Distinguish between the different sources of financing including short term debt, long term debt and equity
  • Discuss the issues and choices involved in a firm’s capital structure decision
  • Discuss the issues and choices involved in a firm’s distribution decision
  • Explain how options can be used to manage basic financial risks

Generic skills

On successful completion of this subject, students should have improved the following generic skills:

  • High level of development: problem solving; interpretation and analysis; critical thinking.
  • Moderate level of development: oral communication; written communication; collaborative learning; statistical reasoning; application of theory to practice; synthesis of data and other information; evaluation of data and other information; accessing data and other information from a range of sources.
  • Some level of development: team work; use of computer software.

Last updated: 31 October 2017