Unit convenor and teaching staff |
Unit convenor and teaching staff
Unit Convenor
Timothy Kyng
Contact via timothy.kyng@mq.edu.au
Two hours per week, timing to be advised, and otherwise by mutual agreement.
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Credit points |
Credit points
4
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Prerequisites |
Prerequisites
ACST603 or (admission to MActPrac post 2014)
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Corequisites |
Corequisites
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Co-badged status |
Co-badged status
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Unit description |
Unit description
This unit covers established methods for the valuation and appraisal of investment projects and related financial decisions. It also covers the new 'real options approach' to investment appraisal, including the application of exotic options pricing formulae to real options using Microsoft Excel to build financial models, and introducing students to Visual Basic/Excel macros for financial modelling.
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Information about important academic dates including deadlines for withdrawing from units are available at https://www.mq.edu.au/study/calendar-of-dates
On successful completion of this unit, you will be able to:
It is the responsibility of students to view their marks for each within session assessment on iLearn within 20 days of posting. If there are any discrepancies, students must contact the unit convenor immediately. Failure to do so will mean that queries received after the release of final results regarding assessment tasks (not including the final exam mark) will not be addressed.
Extensions for the assignments and the case study:
No extensions will be granted. Late tasks will be accepted up to 72 hours after the submission deadline. There will be a deduction of 20% of the total available marks made from the total awarded mark for each 24 hour period or part thereof that the submission is late (for example, 25 hours late in submission – 40% penalty). This penalty does not apply for cases in which an application for special consideration is made and approved.
Name | Weighting | Due |
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Final Examination | 50% | Examination period |
Case Study | 10% | Week 12 |
Assignment 1 | 20% | Week 6 |
Assignment 2 | 20% | Week 10 |
Due: Examination period
Weighting: 50%
Submission
THE EXAM WILL BE CONDUCTED EITHER DURING THE NORMAL EXAMINATION PERIOD OR JUST BEFORE IT. YOU MUST ATTEND AND DO THE EXAM IN THE NORMAL WAY. FOR STUDENTS BASED OUTSIDE SYDNEY, YOU SHOULD CONTACT THE UNIT COORDINATOR SO WE CAN MAKE ALTERNATIVE ARRANGEMENTS FOR YOU TO DO THE EXAM
Extension
IF YOU DON'T ATTEND THE FINAL EXAM YOU WILL FAIL THE UNIT. IF YOU CAN'T ATTEND THE EXAM DUE TO ILLNESS OR MISADVENTURE YOU CAN APPLY FOR SPECIAL CONSIDERATION, BUT YOU MUST PROVIDE SUPPORTING EVIDENCE TO EXPLAIN WHY YOU DIDN'T ATTEND.
Penalties
IF YOU DON'T ATTEND THE FINAL EXAM AND YOU ARE GRANTED SPECIAL CONSIDERATION, YOU MAY HAVE TO SIT A SUPPLEMENTARY EXAM. OTHERWISE YOU WOULD FAIL THE UNIT.
Due: Week 12
Weighting: 10%
Submission
SUBMIT YOUR WORD AND EXCEL FILES ELECTRONICALLY (METHOD TO BE ADVISED)
Due: Week 6
Weighting: 20%
Submission
SUBMIT YOUR WORD AND EXCEL FILES ELECTRONICALLY (METHOD TO BE ADVISED)
Due: Week 10
Weighting: 20%
Submission
SUBMIT YOUR WORD AND EXCEL FILES ELECTRONICALLY (METHOD TO BE ADVISED)
Classes
For campus students:
For distance students:
Required and Recommended Texts and/or Materials Prescribed
Textbooks:
There is no specific required text for this unit. However the following books are useful references:
The recommended texts are not available from the Macquarie University Co-op Bookshop.
The recommended texts are not available in the Macquarie Library.
Technology Used and Required
Unit Web Page
Course material is available on the learning management system (iLearn)
The web page for this unit can be found at: [URL to be advised]
Teaching and Learning Activities
Changes since last offering
Important information: 1) Timetable for lectures is available at: https://timetables.mq.edu.au/2015/ 2) Semester dates: http://students.mq.edu.au/student_admin/enrolmentguide/academicdates/ 3) Weeks 1-6: 23rd February - 3rd April 2015, Weeks 7-13: 20th April - 5th June 2015, Mid Term Break 6th April - 17th April 2015 4) NSW public holidays: http://www.industrialrelations.nsw.gov.au/oirwww/NSW_public_holidays/NSW_Public_Holidays.page 5) Lectures this semester are scheduled for Friday 2-5pm. Friday of week 6 is 3rd april 2015 and this is a public holiday. No lecture that day. Lectures will be held in weeks 1-5 and 7-13 of semester 1. Lectures 1-5 will be in weeks 1-5 and lectures 6-12 will be in weeks 7-13 respectively |
week commencing |
week |
lecture |
content |
Monday, 23 February 2015 |
1 |
1 |
Basic Financial mathematics: Interest rates, present value, future value, annuities, perpetuities, bonds; intro to excel |
Monday, 2 March 2015 |
2 |
2 |
Introduction to capital budgeting. Further topics in financial mathematics: Present value and future value loans and leases, loan repayment schedules |
Monday, 9 March 2015 |
3 |
3 |
Project cashflows and methods for their estimation. Examples of asset expansion, retirement and replacement projects |
Monday, 16 March 2015 |
4 |
4 |
(i) Elementary methods of forecasting. (ii) Matrix algebra and implementation in excel |
Monday, 23 March 2015 |
5 |
5 |
(i) Analysis of leasing decisions, (ii) leveraged leases and their analysis using alternative measures of return. |
Monday, 30 March 2015 |
6 |
public holiday |
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Monday, 6 April 2015 |
mid term break |
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Monday, 13 April 2015 |
mid term break |
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Monday, 20 April 2015 |
7 |
6 |
(i) Project evaluation methods: npv, irr, pp, arr. Application to asset replacement, retirement and expansion projects. (ii) Methods for choosing the discount rate for npv analysis. |
Monday, 27 April 2015 |
8 |
7 |
(i) Project evaluation methods: npv, irr, pp, arr. Application to asset replacement, retirement and expansion projects. (ii) Methods for choosing the discount rate for npv analysis. |
Monday, 4 May 2015 |
9 |
8 |
(i) Methods for estimating model parameters, (ii) Sensitivity and breakeven analysis: implementation in excel |
Monday, 11 May 2015 |
10 |
9 |
(1) Introduction to options and valuation via the black scholes model, (2) monte carlo simulation modelling for stock prices and option valuation |
Monday, 18 May 2015 |
11 |
10 |
Binomial option pricing methods and implementation in excel |
Monday, 25 May 2015 |
12 |
11 |
The flaws in the traditional methods of investment appraisal and introduction to the real options approach to valuation of projects with flexibility |
Monday, 1 June 2015 |
13 |
12 |
More on real options analysis: parameter estimation, embedded exotic options, application of exotic option valuation theory to real options examples |
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