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ACST8029 – Capital Budgeting and Financial Modelling

2020 – Session 1, Weekday attendance, North Ryde

Coronavirus (COVID-19) Update

Due to the Coronavirus (COVID-19) pandemic, any references to assessment tasks and on-campus delivery may no longer be up-to-date on this page.

Students should consult iLearn for revised unit information.

Find out more about the Coronavirus (COVID-19) and potential impacts staff and students

General Information

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Unit convenor and teaching staff Unit convenor and teaching staff
Timothy Kyng
Hong Xie
Credit points Credit points
Prerequisites Prerequisites
ACST603 or ACST6003 or admission to MActPrac
Corequisites Corequisites
Co-badged status Co-badged status
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.

Important Academic Dates

Information about important academic dates including deadlines for withdrawing from units are available at https://students.mq.edu.au/important-dates

Learning Outcomes

On successful completion of this unit, you will be able to:

  • ULO1: Understand current established methods for the valuation and appraisal of investment projects, their advantages and disadvantages and the development of financial models for this purpose.
  • ULO2: Build the financial models and perform the calculations to implement these methods using microsoft excel.
  • ULO3: Demonstrate an introductory understanding of the “real options approach” to investment appraisal.
  • ULO4: Document a financial decision making problem and its solution using spreadsheet software and communicate the results to interested stakeholders.

Assessment Tasks

Coronavirus (COVID-19) Update

Assessment details are no longer provided here as a result of changes due to the Coronavirus (COVID-19) pandemic.

Students should consult iLearn for revised unit information.

Find out more about the Coronavirus (COVID-19) and potential impacts staff and students

Delivery and Resources

Coronavirus (COVID-19) Update

Any references to on-campus delivery below may no longer be relevant due to COVID-19.

Please check here for updated delivery information: https://ask.mq.edu.au/account/pub/display/unit_status

A 3 hour combined lecture / tutorial / computer lab session will be held each week. In some weeks this will be mostly lecture content and in others mostly practical / spreadsheet modeling exercises. 

Unit Schedule

Coronavirus (COVID-19) Update

The unit schedule/topics and any references to on-campus delivery below may no longer be relevant due to COVID-19. Please consult iLearn for latest details, and check here for updated delivery information: https://ask.mq.edu.au/account/pub/display/unit_status

Weekly Topics Covered:

1. Introduction to excel, introductory financial mathematics & functions. Translating mathematical formulae into excel code. Application to pricing bonds and bills. Excel implementation.

2. Further topics in financial mathematics. Amortizing loans, annuities, leases & bonds. Excel implementation.

3. Introduction to capital budgeting. Project cashflows and methods for their estimation

4. Elementary methods of forecasting. Matrix algebra and applications. Implementation in excel.

5. Project appraisal using NPV, IRR, ARR, PP and other methods. Excel implementation

6. Methods for estimating model parameters, Sensitivity and breakeven analysis. Case Studies

7. Class test

8. Introduction to options and valuation via the Black Scholes model.

9. Binomial option pricing methods and implementation in excel.

10. Monte Carlo simulation modelling and financial applications.

11. The "real options approach" to valuation of projects.

12. Case Studies

13. Case Studies and revision

Policies and Procedures

Macquarie University policies and procedures are accessible from Policy Central (https://staff.mq.edu.au/work/strategy-planning-and-governance/university-policies-and-procedures/policy-central). Students should be aware of the following policies in particular with regard to Learning and Teaching:

Students seeking more policy resources can visit the Student Policy Gateway (https://students.mq.edu.au/support/study/student-policy-gateway). It is your one-stop-shop for the key policies you need to know about throughout your undergraduate student journey.

If you would like to see all the policies relevant to Learning and Teaching visit Policy Central (https://staff.mq.edu.au/work/strategy-planning-and-governance/university-policies-and-procedures/policy-central).

Student Code of Conduct

Macquarie University students have a responsibility to be familiar with the Student Code of Conduct: https://students.mq.edu.au/study/getting-started/student-conduct​


Results published on platform other than eStudent, (eg. iLearn, Coursera etc.) or released directly by your Unit Convenor, are not confirmed as they are subject to final approval by the University. Once approved, final results will be sent to your student email address and will be made available in eStudent. For more information visit ask.mq.edu.au or if you are a Global MBA student contact globalmba.support@mq.edu.au

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Equity Support

Students with a disability are encouraged to contact the Disability Service who can provide appropriate help with any issues that arise during their studies.

IT Help

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When using the University's IT, you must adhere to the Acceptable Use of IT Resources Policy. The policy applies to all who connect to the MQ network including students.

Changes since First Published

Date Description
07/02/2020 Minor changes to general assessment information.