ØKA1019 Investments and Financial Management

    • Course code
      ØKA1019
    • Number of credits
      7,5
    • Teaching semester
      2024 Spring
    • Language of instruction
      English
    • Campus
      Lillehammer
    • Required prerequisite knowledge

      Suggested prerequisites: ØKA1016 Grunnleggende bedriftsøkonomi, ØKA1012 Grunnleggende regnskap, ØKA1025 Matematikk for økonomer og ØKA1026 Statistikk for økonomer.

Course content
  • Models and techniques for budgeting relevant cash flows.
  • Time value of money, interest rates and discounted cash flows.
  • Models and techniques for valuing investments- and financing projects: Net Present Value, Internal rate of return, The payback rule.
  • Assessing risk using sensitivity analysis and star charts.
  • Cost of capital, capital asset pricing model, risk adjusted return.
  • Financing sources.
  • Relation between debt ratio and risk for the owners.

Learning Outcome

Upon completion of the course, the student shall be able to:

Knowledge
  • identify situations and decision problems where investment analysis is relevant to use.
  • describe the concept of time value of money and use the terms nominal-, real-, and risk adjusted interest rate correctly.
  • describe and compare key methods used to make investment decisions.
  • describe key methods for assessing risk associated with investment decisions; sensitivity analysis; scenario analysis; decision trees.
  • explain how the capital asset pricing models works and interpret empirical results from real life applications.
  • explain the relation between debt ratio and risk for the firm.
Skills
  • budget decision relevant cash flows for both investment- and financing decisions.
  • assess the value of various investments based on net present value (NPV), internal rate of return, and the payback rule.
  • assess various financing opportunities based using net present value and effective interest rate.
  • develop decision support for investment- and financing decisions using appropriate valuation and risk assessment techniques. 
  • apply the capital asset pricing model (CAPM) to estimate risk adjusted cost of capital whenever the market risk is relevant.
  • assess the value of investment- and financing decisions with a focus on (1) time value of money, (2) coping with risk, and (3) calculations of relevant cash flows.
General competence
  • explain and discuss the value of flexibility with peers and decision makers when it comes to firms’ investment decisions.
Teaching and working methods

The following teaching methods are used:

  • Lectures
  • Exercise sessions
  • Tutorial videos
  • Case studies
  • Quizzes
Required coursework
  • 2-4 mandatory assignments must be passed to be allow to take the exam.
  • These will be combinations of practical and theoretical exercises covering key topics in the course.
Assessments
Form of assessmentGrading scaleGroupingDuration of assessmentSupport materialsProportionComment
Written examination with invigilation
ECTS - A-F
Individual
4 Hour(s)
  • Approved calculator
100
About permitted aids: calculator in line with the requirements given by the study program.
Professional overlap
NameCreditsDateComment
3BED200 Investering og finansiering
7,5
KBED200 Investering og finansiering
7,5
SBED200 Investering og finansiering
7,5

Reading list

Course name in Norwegian Nynorsk: 
Investering og finansiering
Course name in Norwegian Bokmål: 
Investments and Financial Management
Faculty
Inland School of Business and Social Sciences
Department
Department of Business Administration
Area of study
Økonomisk-administrativ utdanning
Programme of study
Bachelor of Business Administration
Course level
Foundation courses, level I (100-LN)