Ateneo - UPO

This course aims to introduce some tools able to support firm's growth choices, from the perspective of the evaluation of operating investments.
In particular, the concept of "financial flows" will be developed starting from accounting documents and evolving towards a financial perspective. These concepts, initially developed at firm level, will be subsequently employed for capital budgeting evaluations of specific operating investments. The final part of the course will introduce to the evaluation of the cost of capital.

Erbetta F. Fraquelli G., Finanza aziendale- Strumenti per le scelte di investimento, CEA, 2007, Ch. 1,2,3,5.
The teaching material also includes slides, exercise and possible additional material available on the D.I.R. page of the course.
An equivalent teaching material will be made available in English by the teacher

The course aims to provide tools able to support the evaluation of investment choices in a firm context.
In particular, the course aims to put students in a position to be able to interpret accounting data in a financial perspective, to apply capital budgeting techniques for evaluating specific investments, being also able to manage (at a basic level) the issue of determining the cost of capital

None

Frontal lectures and exercises

None

The exam is written, with a maximum score of 30/30 cum laude.
The written examination consists of two parts.
The theoretical part (maximum score 18 points) aims at verifying knowledge and understanding of the program. It is composed of 12 closed-ended questions (1.5 points for each correct answer; 0 point in case of no answer; -0.5 points in case of wrong answer).
The applied part (maximum score 15 points) tests the ability to apply knowledge and making judgments, through a problem set, composed of three questions, or three separated exercises.
The test will last 60-70 minutes and is passed with a minimum score of 18/30.
The final score of the integrated course is computed as the simple average of the results of the tests related to the two modules. The students have to pass both the exams.
Students can choose to take the exam in English.
Warning: if a student does not pass the exam, or results as “not sufficient”, withdraws from the exam, or refuse the mark of the exam three times in the same year, he cannot participate again at the exam until the following year.

The content of this module aims, after recalling the main economic and financial variables, to deepen the analysis of cash flows and of capital budgeting techniques.
Topics:
- financial flows: balance sheet, income statement, funds-flow statement; cash flow statement;
- Capital budgeting techniques:
*Discounting, present value and relationship between risk and return
* project cash flows
* Net present vaue
* Profitability index
* Internal rate of return
*Pay-back period
- Introduction to the cost of capital and relation with the projects value

At the end of the course, students will have acquired knowledge and understanding of concepts in relation to:
- usefulness of accounting information in a financial perspective
- definitions, similarities and differences among the main capital budgeting techniques
- methods for determining the cost of capital

The course requires students to develop the ability of applying the acquired knowledge and the concept understood in the following fields:
- interpreting accounting information in a financial perspective
- evaluating industrial investment options in a financial perspective on the basis of capital budgeting techniques
- understanding and intepreting the main relevant information for determining the cost of capital