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Department of Accounting and Finance

AFW1000
Principles of accounting
and finance

Mode: On-campus

Semester 2

Unit Coordinator: Ravi Narayanan

This unit is taught at the following Monash
campuses: Berwick, Peninsula, Sunway
and also at Singapore through TMC
Educational Group.

These campuses and institutions have their
own lecturer in charge of teaching and
administering the unit. These campus
based lecturers should be the first contact
point for students who are enrolled at their
campus. You will be advised, via on-
campus lectures, memo or Blackboard, at
the commencement of semester, the
names of the teaching staff involved and
their contact information and consultation
availability.

......... ASSESSMENT ............ HEALTH................. RELIGIOUS/SPIRITUAL.... EDUCATIONAL........................Table of Contents 1......... FINANCIAL.......... RESOURCES AND REQUIREMENTS ................6 4.............4 3.................................................. PROGRAM .............................2 2.............AU/COMMUNITY-SERVICES/ABOUT-US...... PSYCHOLOGICAL................................................ UNIT INTRODUCTION .......................................... WELLBEING AND DEVELOPMENT CONTRIBUTES TO THE UNIVERSITY'S GOALS BY PROVIDING SUPPORT AND ADVICE TO STUDENTS AND STAFF ON EMOTIONAL................ HTTP://ADM....................................................................................9 HEALTH................................................................................ CHILD CARE AND PHYSICAL PROBLEMS IN ORDER TO ENHANCE THEIR ACADEMIC PERFORMANCE AND THE UNIVERSITY COMMUNITY LIFE....................................HTML........................... ACCOMMODATION....EDU.......MONASH..........17 9431/1 ..........

interpreting information for managers to use in planning. revision.g. Unit Introduction Unit synopsis This unit is an introduction to basic concepts in accounting and the application of these concepts for decision- making by a wide range of potential users (e. financial maths. Accounting standard changes occur each year. together with time spent in general study. understand the relevance of accounting information for informed decision-making by a wide range of potential users. Topics covered include the accounting equation. analyse and interpret financial reports and explain their use for decision-making 3.1. 2 . At Monash students are responsible for taking their own notes from the prescribed texts. students should attempt the set of tutorial and assignment questions. On completion of the required reading. A week by week timetable has been provided to guide your study program and also to indicate assignment due dates and non-teaching periods. which are available via Blackboard. describe the elements of financial reports. This includes time spent in preparing for and completing assessment tasks.. you should plan to spend an additional 117 hours during the semester in study for this unit. A specifically prepared unit guide is also available on Blackboard. Students should ensure answers are included in notes for each topic to assist with revision of the unit. investment analysts. All answers to tutorial questions will appear on Blackboard. cash and accrual accounting. financial statement analysis. Teaching and learning approach This unit is divided into 12 topics spread over a 13-week teaching period. Please acquaint yourself with the terms and use them correctly in your assignments. apply critical thinking. students should have a clear understanding of the accounting process and the language of accounting to enable communication with an accounting professional. Unit objectives The learning goals associated with this unit are to: 1. shareholders. and examination preparation. lenders. The topics listed in the week by week program will be covered in on campus lectures and tutorials. Time commitment This unit is worth six (6) credit points. and have the ability to analyse and interpret accounting information. This unit should benefit students who wish to specialise in accounting. The following new terminology will be used throughout this unit. Important changes to terminology with new accounting standards Some of you may have acquired previous accounting knowledge and may be use to certain accounting terminology. capital budgeting and investments. and will also be of value to students whose primary interest lies elsewhere in the field of business. interpreting information (financial and non-financial) for managers to use in planning. decision-making and control.). On completion. and from 1 January 2005 Australia has adopted International Accounting Standards some with an Australian revision. managers etc. The total time commitment expected for this unit is 156 hours. apply double entry recording and prepare basic financial reports 2. decision-making and control 4. This equates to 12 hours per week of which three are in class. general purpose financial reports. In addition to the 39 hours of class contact. understand how to make capital budgeting and investment decision using ‘Net Present Value’ 5. adjustments. problem solving and presentation skills to individual and/or group activities dealing with introductory accounting.

to promote student discussion. Operating statement. If you do not have a copy of PowerPoint. however. Remember that as university students you are expected to be independent learners and this tool will enable you to develop the skills required for independent learning while working as a group. Income statement Statement of financial performance Statement of financial position Balance sheet Intangibles Intangible assets Accounts payable Payables Borrowings Interest-bearing borrowings Issued capital. Please note that downloadable material is often saved as either a PDF file that can be opened in Adobe Acrobat (a viewer version of this software can be downloaded for free from your “My Monash Portal”) or as a rich text file. units on issue Contributed capital Revenue Income SAC 3 and SAC 4 The framework Tutorial allocation All students must enrol themselves in a tutorial group using Allocate +: For information please go to: http://allocate. The following briefly describes some of the information available on the site:  The Unit Material — Unit Guide. these files can be accessed using Adobe Acrobat. the academic staff will tend to be ‘lurkers’ and will answer email questions/discussions where students get on the wrong track or are covering a particularly difficult issue. Some academic staff may prefer to save lecture files as PDF. Previous Terminology New Terminology Profit and loss statement.cc. The academic staff would prefer students to use the bulletin board as a facility to answer each others’ questions rather than expect the academic staff to provide all the answers.  The unit provides weekly lecture notes that are usually saved as PowerPoint files. 3 . there is a link on your My Monash Portal page to download a viewer version of the software for free. Assignments and Unit Outline can be downloaded and saved to your own computer. Academic staff can also be contacted using the bulletin board. across many campuses and even countries. which can be opened in any word processing package.monash.edu.  The main communication tool for student use is the bulletin board.au/ Blackboard All the study materials for AFW1000 may be accessed online. The bulletin board is a tool to enable you to communicate with other students and discuss certain issues similar to the classroom situation.

et al. A list of the units that you will be studying during the current semester.  Another communication tool is the calendar.au/students/computer 2.edu. Contemporary accounting (6th edition). The central university systems will automatically create a Blackboard account for you if the unit you have enrolled in has Blackboard support. Both academic staff and students can make entries on the calendar. P. Prescribed text(s) Carey. NSW.edu.buseco. Australia Check with your campus lecturer. (2009). Australia Chalmers.edu. The unit covers basic accounting concepts and assumes no background knowledge. (2006). It is the user name you will use to access the computer labs on campus and the online electronic databases in the Monash Library. Your password for your Authcate username.monash. (2007). Australia Trotman. If you have made a change to your enrolment. et al. Some of the introductory texts currently available from the library are listed below: Bazley. Australia Peirson. Milton. M. (2006). Nelson Australia Pty Ltd Horngren. Pearson Education.monash. Your Authcate user name. the change will be processed as soon as possible and may take a couple of days to be reflected in Blackboard. Note that not all of the units you are enrolled in will have a Blackboard site for you to access. G. it can be obtained from: https://mdsadmin.edu. Pearson Education.au/publications/qmanual/qmanual.au/cgi-bin/changepwd?forgotten 3.pdf. Accounting (5th edition). for other textbooks. Brisbane. John Wiley. & Hancock. QLD. Financial accounting: An integrated approach (3rd edition).T. If you have forgotten your Authcate password. Resources and Requirements Unit requirements There are no prerequisites for AFW1000. M. or if you find a useful one not on the list. Q Manual The Q Manual is a student guide for producing quality work on time. Principles of Financial Accounting (1st edition).monash. or meeting dates for an online chat session. NSW. If you do not know your Authcate username. Please feel free to place a notice on the bulletin board alerting other students. & Ramsay. This can be obtained from the Monash Computer Centre if you do not have one. 4 . Before you can access Blackboard you will need the following information: 1. P. K. (2005).monash. Printed copies are available at the bookshops or online at: http://www. QLD.. Financial accounting: An introduction (4th edition).Monash Portal at: https://my. French Forest. such as assignment due dates..au/ 2. Thompson. (2007).. You can also make personalised notations and use the calendar similar to a diary to highlight important personal dates that you have in the future. How can you get access to Blackboard? The site can be accessed under the “blackboard” tab in your My. it can be obtained from the following address: www. Australia NB: Available through the campus bookshops Other introductory accounting Text Books There are many other introductory accounting texts in the library which you can consult if you have difficulties understanding a particular topic. & Gibbins. Principles of accounting and finance. John Wiley & Sons. K. C. A.

students may be provided with assignment feedback sheets that provide them with advice about seeking additional help to develop their writing (CALT) or research skills (library).monash. Currently.Examinations – use of calculators Programmable calculators. as well as their tutor’s and peers. or seen a CALT Learning Support staff member and identified as needing intensive support. . All students are welcome to attend classes. Student Support Students are able to access academic support provided by CALT (Centre for the Advancement of Learning and Teaching).au/cheq/evaluations/. Features include content. including on-line/hard copy unit evaluations. tutor. . and to promote discussion and common understandings.students may be provided with opportunities to answer questions in lectures and tutorials – obtaining feedback on the understanding of key points. Students are strongly encouraged to take note of. graphics calculators and calculators that have the capability to communicate with other devices are NOT permitted in tests and exams in the Faculty of Business and Economics. .edu. workload. Two major surveys might be conducted each semester. In regards to the types of feedback on assessment: .adm. the individual and class feedback. Feedback from Students At Monash formal feedback from students is sought via a variety of surveys. workshops and drop-in centres run by CALT Learning Support staff. individual consultations are available for intensive work on approaches to study or English language skills for the following students: • Referred by Academic Progress Committee hearing • Received an early warning letter • Failed an assignment or unit and have a signed referral form from lecturer. The expectations are presented in the unit objectives and assessment criteria. with a view to obtaining consistent and quality information. • The MonQueST questionnaire is structured to enable student feedback to be obtained on specific aspects of an individual’s teaching.students may also be provided with model answers or feedback on their general performance on common tasks.students may also be regularly provided with verbal feedback on important issues to be noted from teaching and learning materials. reference material and overall satisfaction of the unit. or other support service personnel • Referred by lecturer. and act on. 5 . tutor. or other support service personnel and have a signed referral form • Attended a 15 minute drop-in session. . For details see URL: http://www.students may have set theory and practical work which are discussed in tutorials enabling them to gain feedback on their own perceptions. Calculators MUST be identified with an “approved for use” label which can be obtained from the School of Business and Economics Student Feedback and Support Services Feedback to Students Students will receive feedback on work in the following ways: • individual feedback on assignments • in class discussions • problem solving in tutorials Feedback on work helps students understand the unit’s academic expectations and progress towards these expectations. • Unit evaluation surveys enable students to provide feedback on features of units. with the feedback being given to the lecturers so that they can make improvements to their teaching methods.

Program The lecture and tutorial program outlines the broad topics to be covered. is available at: http://www.Further information about student support services. including advice on Student Rights Assistance.edu.monash. Students are requested to come to tutorials with prepared answers to be discussed (see Tutorial Program).au/community-services/ 3.adm. All answers to tutorial questions will be available on Blackboard on the Friday of that week. 6 .

(2009). Cost Information for Internal Decision-Making Carey. (2009). Chapter 3 Concentrating on posting general Journal entries to the Ledger and Trial Balance Aug 10 4. Carey. (2009). Chapter 4 Aug 17 5. P. Chapter 11 Oct 19 UNIT REVISION Oct 26 SWOT VAC Oct 29. P. (2009). Chapter 10 Sept 28 NON-TEACHING WEEK Oct 5 11 Financial mathematics 2 Carey. General Purpose Accounting Reports Carey. P. P. Chapter 9 Accounting Information Sept 21 10 Introduction to finance and financial mathematics 1 Carey. (2009). Financing the Business Carey. P. Cash and Accrual Accounting and Statement of Carey. (2009). Introduction to Accounting Carey. (2009). (2009). Performance Measurement Carey. Chapter 6 Aug 31 7. (2009). P. Chapter 8 Sept 14 9. P. The Recording Process. Financial Statement Analysis Carey. P. Chapter 10 Oct 12 12.Lecture program Date Topic Required Readings July 20 1. (2009). P. P. Chapter 5 Aug 24 6. (2009). P. P. EXAMS BEGIN 20 Nov 7 . Chapter 1 July 27 2. Chapter 7 Sept 7 8. (2009). Budgeting and the Behavioural Implication of Carey. Chapter 2 Cash Flows Aug 3 3. Adjusting the Accounts Carey.

3. 5. 3. 41. 5. Budgeting and the Behavioural Chapter 9: Questions 1.3. 11 Brief Exercises: 6-1. Brief Exercises: 1-1. Chapter 3: Questions 2.1. 6.8.8 Problems: 5. 7. 38. 28.2. Chapter 3: Problem 3. 6-8 Exercises: 6-4. Brief Exercises: 4-3.2. 8.5. 3-5. 11-5 Problems: 11-8. Brief Exercises: 3-2. 4. 8. Aug 31 6. 5. 4.1 Aug 10 3. 25. 11-2. 6. Exercises: 11-1.15. Problems: 2. 7. Problems: 4. 43. Sept 7 7. 13. Cost Information for Internal Decision. 4-4. 3.11 UNIT REVISION Students should note that the lecture and tutorial programs outlined above are a guide to the material to be covered in this unit and not a definitive statement of when that material will be covered. mathematics 1 24. 3-8. 5-5. 19. Exercises: 5-4. 5. 5-6. 3. 50. 4-7 Exercises: 4-3. Statement of Cash Flows Brief Exercises: 2. 13. 8 . Sept 21 9. 2. 5.14. The Recording Process. 6. 27. 12. 9.1-10 Aug 3 2. 1-3. 15. Financing the Business Chapter 11: Questions 3. 10. 1-4. 2-3. 2009) July 20 Orientation No Work Preparation required July 27 1. Implication of Accounting Information Sept 28 NON-TEACHING WEEK Oct 5 10 Introduction to finance and financial Chapter 10: Questions 1. 4. Performance Measurement Chapter 7: Questions 1.1. 3. 3. Oct 12 11 Financial mathematics 2 Chapter 10: Questions 37. Oct 19 12. 3. 2. Sept 14 8. 10. 7. 6-7 Problems: 6-1. 20. 15 Brief Exercises: 5-2. Journal entries to the Ledger and Trial Balance Aug 17 4. Making 18.. 12. 14. and posted on Blackboard unit website. 23. 18. Chapter 8: Questions 1. 11. 3. 48.6 Aug 24 5. 1-7. 13. P.4 Exercises: 2-1. 6-2.17. Cash and Accrual Accounting and Chapter 2: Questions 1. 3. Financial Statement Analysis Chapter 6: Questions 2. 16. Adjusting the Accounts Chapter 4: Questions: 1. 5. General Purpose Accounting Reports Chapter 5: Questions 3. Specific details relating to the timing will be discussed in lectures and tutorials.Tutorial Program Date Topic Required Preparation (Carey. 10. 2. 3-9. 9.10. 49. 6.13. Introduction to Accounting Chapter 1: Questions 1. 12. 7. 3. 16. 17.10 Concentrating on posting general Exercises: 3-1. 4. 42. 2. 7.

4. 3. your maximum final mark for the unit will be 43%. Note: If your final mark is from 45% to 49% then the Board of Examiners may award a Near Pass (NP). Second marking Where a written work submitted for assessment is given a Fail grade by an examiner.html. Final marks and grades Faculty policy states that 'the final mark that a student receives for a unit will be determined by the Board of Examiners on the recommendation of the Chief Examiner taking into account all aspects of assessment'. Where you achieve less than 40% in the final examination. 2009 before 5PM 15% (Week 7) Requires application of materials covered in lectures Weeks 1-5 (Unit Objectives 1 and 2) Assignment 2 Due Friday 2nd Oct. For more information on the NP policy please refer to the following link: See: http://www. Participation and preparation (5%) will be graded by tutors and communicated to students by tutors in week 13 Final Examination (Unit Official Examination Period is between 29th 60% Objectives 1.edu. and 4) October to 20th November 2009 Total 100% Hurdle requirement Your final mark will be the sum of the marks gained in all pieces of assessment. See list of presentation topics below. No student will be awarded a Fail grade for an assessment task or unit without a second examiner confirming the result.monash. and consult with the first marker. that piece of work will be marked again by a second examiner who will independently evaluate the work. except that to pass this unit you must achieve at least 50% in the final examination. Note: Exceptions to this are pieces of work contributing no more than 10% of the final mark. Assessment Assessment Summary Assessment Task Due Date Value Assignment 1 Due Monday 7th Sept.au/secretariat/policies/near-pass-fb-0507. 2. Where you achieve from 40% to 49% in the final examination your maximum final mark for the unit will be 45%. unless the total of such pieces exceeds 30% of the final mark.buseco. 2009 before 5PM (Week 15% 10) Requires application of materials covered in lectures Weeks 7-9 (Unit Objectives 3 and 4) Tutorial Participation & Student presentations (5%) will be graded 10% Presentations by tutors for presentation from Week 2-13. 9 .

It is a student’s right to seek clarification of their assignment grade with their Lecturer or Tutor on campus. NO assignment will be accepted or marked if it is not accompanied by a signed Assignment cover sheet. Marking guide See the marking rubric (back page of the Unit Outline) as a guide for the awarding of grades throughout the Faculty. When using continuous feed paper. please trim tractor edge.au/student/forms/application-for-extension%20for-submission-of- assessment. 2009. You are advised to use computers when preparing the first assignment.edu.pdf Penalties for late lodgement A maximum penalty of 10 per cent of the mark allocated to this assessment task will be deducted for each day that the assessment is late. 2.monash. Final Examination 10 . Approval. 17:00 .to be submitted in your respective campus drop-box provided Assignment 2: Oct. In the event that this proves to be unsatisfactory they may approach the Chief Examiner for assistance. See http://www. Copies of this Manual can be obtained at the bookshop or on line at: http://www. You will receive your assignment cover sheets with your off campus materials. will be in writing and will be recorded on the Faculty Assignment cover sheet accompanying the assessment task by the responsible lecturer/tutor. Faculty Style Guide Work submitted for this assessment must follow the Faculty Style as outlined in the Faculty Q Manual. 2009. if granted. 7.to be submitted in your respective campus drop-box provided Applications for extension of time All applications for an extension of the time allocated to an assessment task must be made in writing to the Unit Leader on the appropriate campus.buseco. Assignment Cover Sheets Work submitted for assessment must be accompanied by a completed copy of the Assignment cover sheet which has been signed by the student.monash.Assessment Details The two Assignments have been specified in section 5 of this outline These tasks are for an individual No provision is made for students to resubmit work for higher assessment.edu. Instructions to students Students are required to retain a copy of their assignment(s) until results are finalised. 17:00 .au/publications/qmanual/ Submission instructions Submission date and time Assignment 1: Sept. In this day of technology all students should have computer access and are expected to make use of computers.buseco. Return of Marked Assignments Marked assignments will be returned to students within 3 weeks.

11 .edu. Examination date and location This examination will be held during the official examination period. those sources must be acknowledged in full.au/teaching/academic- integrity/student/res_student2. However. Details regarding eligibility. More information regarding exam format will be available towards the end of the semester. supporting documentation requirements and an application form can be found at URL: http://www. and attendance. Examination Duration This will be a 3 hour examination. theory and practical questions. The exam will contribute 60% of the final grade in the unit.html.edu. Submitted work must therefore be a student's own work.monash. Student results will be accessible through the my.monash. Practice exam questions with solutions will be made available on the unit Blackboard for revision purposes towards the end of the semester. Collaboration. assignment or final exam has been affected by illness or other serious cause may apply for special consideration. in quoting or paraphrasing material from other sources. This does not mean that students may not make use of the work of others. closing dates. performance in a semester test.monash portal. Collusion. The examination timetable which provides full details of the examination schedule can be accessed through the my.monash portal.buseco. For more information please refer to URL: http://www.Marks available will be marked out of 100%.au/student/exams/. Return of Final Marks for the Unit The final mark for this unit will be released by the Board of Examiners on the date nominated in the Faculty Calendar. Plagiarism and Cheating The submission of written work such as essays and assignments is an essential part of the learning process and a vital way of assessing students' understanding of an area of study. class presentation. Special Consideration A student whose work during a teaching period. The examination is closed book and will comprise a combination of multiple choice questions.

This will require you to demonstrate your ability to prepare a 10 column worksheet and financial statements from a list of transactions entered into by a business using both manual and computerized accounting systems. Copies of this Manual can be obtained at the bookshop or on line at: http://www. Each assignment is numbered. Timing. closing entries. 5 = High) on the following criteria: Knowledge and understanding of content. Audience interest and response. 12 .buseco. eye contact). Appropriate use of body language (inc. This assessment is designed to test your achievement of Objectives 1 and 2.5 marks).5. Presentation and Participation (ON-CAMPUS STUDENTS ONLY) – 10% Marks available Students will be required to complete one class presentation which contributes 5% toward the final grade in the subject. 8. Participation will be judged by the tutor based on participation in tutorial discussion (2.15% This is a task for each individual student. Design and use of visual aids. Students will be awarded a maximum of 5 marks by their tutor for participation (Contributing 5% to final grade). Marks will be awarded based on transaction processing.15% This is a task for each individual student. Fluency (speed. prepare balance day adjustments.monash. Students are required to answer the following questions from their textbook (chapters 7. If you are late to enrol. Assignment 2 . & 9) Chapter 7: questions 5 & 16 Chapter 8: questions 3 & 6 Chapter 9: question 4 Faculty Style Guide Work submitted for this assessment must follow the Faculty Style as outlined in the Faculty Q Manual. please contact your Lecturer in the week you enrol to receive your assignment.5 marks) and evidence that students have attempted tutorial problems before class (2. volume and pronunciation). You will receive your assignment via email in Week 3 of the semester. Each student’s assignment will contain a unique series of business transactions generated by a computer program. financial statements and a worksheet. To receive this email you must be officially enrolled in this unit before the end of Week 2. Students will be graded using a 5 point scale (1 = Low.edu.au/publications/qmanual/. format and the presentation and accuracy of the financial statements. Assessment Details Assignment 1 . Ability to work as a team. Using the unique series of business transactions (data) students will be required to record the transactions through the general journal and general ledger. Assignment 1 integrates topics 1 to 5 of this unit. with a record being kept of which numbered assignment you receive.

5 minutes for each student). When there is a difference explain the long term implications for the business.com.. Students will be informed of their participation grade in week 13 tutorial Presentation Topics Week 3: Financial Statements Select a company listed on the Australian Stock Exchange at 30 June 2008. 2.edu. time and location Presentation dates will be allocated by individual tutors. Week 5: Balance Day Adjustments 13 . What % total assets are funded by equity.connect4. There will only be one presentation per tutorial each week. The primary objective of financial reports is to provide useful information to users for „decision making‟.au. Comment on the implication of your findings for the future of the business.html You should click on the 2008 year icon located on the left hand side of the page to access companies in that year.com. Students are not required to present a reconciliation. Presentations will be in groups of two students during tutorials in weeks 2 to 13 of semester. Management engage auditors on behalf of shareholders to improve the quality of financial report.au/products/ar/index. find the annual report and after reading that report answer the following questions: 1. but they should be able to provide reasons for the difference and illustrate the difference using examples of items from the company they choose.e.edu. Review the Directors Declaration and outline the responsibility of senior management in the issuing of financial statements.ezproxy.lib.monash.htm l It is important for a business to generate sufficient cash flow from operations to ensure the company remains viable (solvent).ezproxy.monash. or the white board.lib.connect4. Compare the total net cash flow (Net increase/decrease in cash held) and the cash flow from operations and explain why these numbers differed. Instructions to students If you have a preference regarding a presentation partner.Date. Time allocated Students will have a ten minute time limit for their presentations (i.au. For the company you select. Technology requirements Students may present using an overhead projector (where available). Read the audit report and describe the key responsibility of auditors in the conduct of a financial statement audit? 3. Company data is available from the ‘Annual Report Collection’ data base which can be accessed via the Monash University library at the following web address http://www.au/products/ar/index. please form a group of two in advance and inform your tutor in week one Return of Marks Students will be given written feedback on their presentation in the week following the presentation. Explain the difference between profit and cash flow from operations. 2. Week 4: Cash Flow Select any company with a year ending 2008 from the ‘Annual Report Collection’ data base which can be accessed via the Monash University library at the following web address http://www. Net assets can be funded by either debt or equity. 1. For the company you selected answer the following questions.

4. 2.edu/~wfsharpe/mia/int/mia_int2. For the company you select. Explain how the concept of risk is related to the four characteristics of a financial transaction. Would you invest in this company and why? Week 7: Financial Statement Analysis (Ethics case) Problem BYP 6. Page 333) Week 10: NO PRESENTATION Week 11: William F. At the following URL is an elegant description and definition of what is finance by Professor Sharpe: http://www. What is William F.com. Explain the evolution of the economy from a barter economy to a monetary economy and finally to a financial economy. Capital can increase/decrease in two ways: profit/loss and contribution/distribution. Discuss a real life example of the risk-return trade-off in finance and state the specific type of risk that arises in your example. Week 12: 14 .stanford. Required 1. highight an example that differentiates an economic transaction from a financial transaction and discuss the four characteristics of the financial transaction.edu. With reference to the article by Kirchgaessner and Waters (2002) „Beaumont role under WorldCom spotlight‟. 3. If interest rate is falling but credit is scarce as in the current climate.ezproxy.au. One of the fundamental principles in finance is that higher risk should be rewarded with a higher return.connect4. Further research will deepen your understanding of the issues involved. Assets can be funded by debt. what are the implications for shareholders? 2. find the annual report and after reading that report answer the following questions: 1. Company data is available from the ‘Annual Report Collection’ data base which can be accessed via the Monash University library at the following URL: http://www. Sharpe is one of the most respected Financial Economists of all time. Briefly describe the circumstances surrounding the collapse of WorldCom in 2002. and use the profit figure to assess their investment performance? What is the % increase/decrease in the net profit/loss from last year? What is the main source of revenue contributing to profit? 3.4 (Carey 2009.monash.html . Explain why the trading of money now for money in the future can be beneficial to an economy. and the cost of debt is interest. 1. You should click on the 2008 year icon located on the left hand side of the page to access companies in that year.au/products/ar/index. Which item made the largest impact on the statement of changes in owner’s equity? 4. explain why a monetary economy is superior to a barter economy and similarly. 5. Week 6: Financial Statements Select a company listed on the Australian Stock Exchange at 30 June 2008. why a financial economy is superior to a monetary economy.lib. Sharpe‟s greatest claim to fame? 2. Hint: Sharpe’s discussion on financial economics at the URL above should serve as a starting point in answering the questions above. In your discussion. Page 259) Week 8: Chapter 7 Question 7 (Carey 2009. What is the fundamental difference between traditional economics and financial economics? In your discussion. Contrast the accounting for the fraud with accounting for prepaid expenses.htm . Shareholders are the main users of financial reports.WorldCom was a large US telecommunications company. describe how senior management at WorldCom managed to perpetrate the worlds largest financial statement fraud. Page 285) Week 9: Budgeting and responsibility accounting Question 5 (Carey 2009.

000 The company considers the expansion of either Nursery A or B to be mutually exclusive. 3. The discount rate of 8% is the company’s best guess based on the assumed risk of the projects. Required 1. you can then use the financial maths skills you have developed to solve the numerical problems. our net sales totaled EUR 51. is a key area of focus. Week 13: Nokia is the world leader in mobility.000 5 $58.000 $55. Assuming a discount rate (interest rate) of 8% p. how has Nokia performed in recent times? Be sure to highlight 15 .5 billion). 25] To answer the questions below. What is this special discount rate called? Hint: The Net Present Value (NPV) project evaluation technique is discussed in almost all standard corporate finance texts. Once you understand the specifics of the NPV technique.2 billion (USD 10. Which nursery should the company expand and why? 7.000 $49.6 billion) and net profit was EUR 7.000 4 $56.000 -$250. driving the transformation and growth of the converging Internet and communications industries. [Nokia Corporation. What is the discount rate that sets the NPV of expanding Nursery A to zero? Show your workings. download Nokia‟s Form 20-F for 2007 from the web. The estimated initial cost of expanding the nurseries and the subsequent increase in cashflows from the expansion is tabulated below: YEAR NURSERY A NURSERY B 0 -$300.000 $51.. We make a wide range of mobile devices with services and software that enable people to experience music. Define the term Net Present Value (NPV). Required 1.1 billion (USD 74. imaging. For 2007.000 7 $62. business mobility and more. and a global network of sales. navigation. 6. video. Developing and growing our offering of consumer Internet services. Obtain one of these texts to teach yourself about the NPV technique. solutions and services for communications through Nokia Siemens Networks.000 1 $50. had production facilities for mobile devices and network infrastructure around the world.000 $53.000 3 $54. What is the NPV decision rule? 4. 5.000 $57. sales in more than 150 countries.Gargorium Ltd. Form 20-F 2007. The company’s optimistic estimate of the discount rate is 6%. customer service and other operational units. p. as well as our enterprise solutions and software. At the end of 2007. We also provide equipment.000 2 $52. television. What is a mutually exclusive project? 2.000 $45. Which of the projects is more risky and why? 9. games.000 $47. Based on the Form 20-F for 2007. we employed 112 262 people. 8. Which project should the company now choose and why? Show your workings.a. what are the NPVs of expanding Nursery A and B? Show your workings.000 6 $60. Recalculate the NPV for both projects using the optimistic discount rate. Gargorium is considering the expansion of two of its current nurseries. Draw a timeline that depicts the cashflows for expanding Nursery A. is a company that owns and operates nurseries.

acknowledgement of sources. Ability to of the topic consider topic in the and to serve as a basis broader context of the for further study discipline Articulation of Demonstrates imagination Evidence of imagination Well-reasoned argument Sound argument based Very little evidence of argument or flair. including the quality of their academic English and approaches to 16 . Accurate and consistent presentation presentation. presentation. will be given a Near Pass (NP) in that unit provided that they have completed all the work for the unit. Analyse and comment on Nokia’s financing situation in the 2006-2007 period. the evidence you have used to reach your conclusion. and have sat the final examination. students enrolled in undergraduate courses managed by the Faculty of Business and Economics who fail a unit with a mark between 45% and 49%. Evidence of an Sound knowledge of Knowledge of principles Scant knowledge of topic awareness and awareness and principles and concepts and concepts at least principles and concepts understanding of deeper understanding of deeper adequate to communicate and more subtle aspects and more subtle aspects intelligently in the topic of the topic. 4.buseco.html. identify the source of this funding. expression and expression and appropriate to presentation.edu.monash. 2. refer to the following: links: http://www. or flair. Nokia spends a considerable amount of money (about EUR 3 billion annually) on research and development.html and for students enrolled prior to 2008 http://www. originality and insight presentation and a degree interpretation and of originality and insight presentation Reading Strong evidence of Evidence of reading Thorough understanding Evidence of having read Very little evidence of independent reading beyond core texts and of core texts and materials core texts and materials having read any of the beyond core texts and materials core texts and materials materials Knowledge of Demonstrates insight.info. Inaccurate the discipline acknowledgement of and inconsistent sources. Using the web. Using key information from the balance sheet and data provided in the business insight in Chapter 11 of your prescribed text.edu. Assignment and Examination Assessment Criteria Grading descriptors High Distinction Distinction Credit Pass Fail (80%+) (70 – 79%) (60 – 69%) (50 – 59%) (Less than 50%) General Outstanding or A very high standard of Demonstrates a high level Satisfies the minimum Fails to satisfy the description exceptional work in terms work which demonstrates of understanding and requirements minimum requirements of understanding. are there any external factors that you can think of that could have affected Nokia’s share price? 3. Is the trend in the share price of Nokia consistent with the evidence in the Form 20-F? If not. In order to stay at the forefront of the mobile communications market.monash. obtain the share price history of Nokia for the past two years. based on broad evidence on evidence ability to construct coherent argument Demonstrates originality Evidence of originality and and independent thought independent thought Analytical and Highly developed Clear evidence of Evidence of analytical and Some evidence of Very little evidence of evaluative skills analytical and evaluative analytical and evaluative evaluative skills analytical and evaluative analytical and evaluative skills skills skills skills Problem Ability to solve very Ability to solve non-routine Ability to use and apply Adequate problem-solving Very little evidence of solving challenging problems problems fundamental concepts skills problem-solving skills and skills Expression and Highly developed skills in Well developed skills in Good skills in expression Adequate skills in Inadequate skills in presentation expression and expression and and presentation. which is confirmed to be the last unit necessary to complete a course of study.au/asg/agu/policies/near- pass-fb-0507.buseco. The Monash University Library provides services and resources to Monash students who want to improve their academic learning skills. For further information. Source: University of Adelaide 2005 Near Pass: From 2008.au/student/exams/np.

monash.html. Further information on learning skills services can be found at: http://www. at the undergraduate and postgraduate levels. religious/spiritual.edu. and academic essay.au/lls. Assistance is offered in such areas as oral communication and presentation.monash. Wellbeing and Development contributes to the university's goals by providing support and advice to students and staff on emotional.au/learning-skills.lib. effective listening and note- taking in lectures and seminars. counselling. report and thesis writing. housing advice and health and medical assistance.edu. family and child care advice. health.edu. Drop-in sessions. A longer appointment may be scheduled for a later date if deemed necessary by the learning skills adviser. accommodation. child care and physical problems in order to enhance their academic performance and the university community life. Health. analysis. financial aid. psychological. 17 . classes and workshops are scheduled throughout the semester. off-campus learners and students with a disability. To access the online resources visit: http://www. http://adm. Health. Online learning support resources are also available for higher degree research students. You can come to a library drop-in session for a brief 10 to 15 minute consultation with a learning skills adviser about your assignment or academic skills. educational.au/community-services/about-us.study. Wellbeing and Development is a branch of the Student and Staff Services Division offering services to students and staff in the areas of chaplaincy. study and exam preparation.monash. reading. problem solving and critical thinking. financial.

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