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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 oncampus lectures, memo or Blackboard, at the commencement of semester, the names of the teaching staff involved and their contact information and consultation availability.

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shareholders. decision-making and control 4. and have the ability to analyse and interpret accounting information. Topics covered include the accounting equation. students should attempt the set of tutorial and assignment questions. Please acquaint yourself with the terms and use them correctly in your assignments. This unit should benefit students who wish to specialise in accounting. The following new terminology will be used throughout this unit. together with time spent in general study. cash and accrual accounting. This includes time spent in preparing for and completing assessment tasks. revision. All answers to tutorial questions will appear on Blackboard. lenders. and will also be of value to students whose primary interest lies elsewhere in the field of business. describe the elements of financial reports. students should have a clear understanding of the accounting process and the language of accounting to enable communication with an accounting professional..). problem solving and presentation skills to individual and/or group activities dealing with introductory accounting. On completion. interpreting information for managers to use in planning. apply critical thinking. The total time commitment expected for this unit is 156 hours. Unit Introduction Unit synopsis This unit is an introduction to basic concepts in accounting and the application of these concepts for decisionmaking by a wide range of potential users (e. general purpose financial reports. At Monash students are responsible for taking their own notes from the prescribed texts. and from 1 January 2005 Australia has adopted International Accounting Standards some with an Australian revision. A week by week timetable has been provided to guide your study program and also to indicate assignment due dates and non-teaching periods. 2 . Accounting standard changes occur each year. Students should ensure answers are included in notes for each topic to assist with revision of the unit. understand how to make capital budgeting and investment decision using ‘Net Present Value’ 5. 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 examination preparation. capital budgeting and investments. 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. A specifically prepared unit guide is also available on Blackboard. which are available via Blackboard. interpreting information (financial and non-financial) for managers to use in planning. investment analysts. Teaching and learning approach This unit is divided into 12 topics spread over a 13-week teaching period.g. managers etc. decision-making and control. In addition to the 39 hours of class contact. financial maths. Unit objectives The learning goals associated with this unit are to: 1. This equates to 12 hours per week of which three are in class. On completion of the required reading. financial statement analysis. adjustments.1. apply double entry recording and prepare basic financial reports 2. you should plan to spend an additional 117 hours during the semester in study for this unit. understand the relevance of accounting information for informed decision-making by a wide range of potential users. analyse and interpret financial reports and explain their use for decision-making 3.

Academic staff can also be contacted using the bulletin board. Some academic staff may prefer to save lecture files as PDF. these files can be accessed using Adobe Acrobat. however.edu. The bulletin board is a tool to enable you to communicate with other students and discuss certain issues similar to the classroom situation. across many campuses and even countries. Assignments and Unit Outline can be downloaded and saved to your own computer.    3 . which can be opened in any word processing package. The following briefly describes some of the information available on the site: The Unit Material — Unit Guide. If you do not have a copy of PowerPoint.au/ Blackboard All the study materials for AFW1000 may be accessed online. 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. 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. Statement of financial performance Statement of financial position Intangibles Accounts payable Borrowings Issued capital. there is a link on your My Monash Portal page to download a viewer version of the software for free. The unit provides weekly lecture notes that are usually saved as PowerPoint files. 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. to promote student discussion.Previous Terminology Profit and loss statement. The main communication tool for student use is the bulletin board. units on issue Revenue SAC 3 and SAC 4 Tutorial allocation New Terminology Income statement Balance sheet Intangible assets Payables Interest-bearing borrowings Contributed capital Income The framework All students must enrol themselves in a tutorial group using Allocate +: For information please go to: http://allocate.monash. Operating statement. 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.cc.

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

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. . 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. .students may have set theory and practical work which are discussed in tutorials enabling them to gain feedback on their own perceptions. workload. . 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. 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. In regards to the types of feedback on assessment: .adm. including on-line/hard copy unit evaluations. All students are welcome to attend classes. or other support service personnel and have a signed referral form Attended a 15 minute drop-in session.au/cheq/evaluations/.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). The expectations are presented in the unit objectives and assessment criteria. Two major surveys might be conducted each semester. and act on.Examinations – use of calculators Programmable calculators.monash. with the feedback being given to the lecturers so that they can make improvements to their teaching methods. Students are strongly encouraged to take note of. • Unit evaluation surveys enable students to provide feedback on features of units. 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. Currently.edu. or other support service personnel Referred by lecturer. reference material and overall satisfaction of the unit. . tutor. workshops and drop-in centres run by CALT Learning Support staff. as well as their tutor’s and peers. tutor.students may also be provided with model answers or feedback on their general performance on common tasks. Feedback from Students At Monash formal feedback from students is sought via a variety of surveys. or seen a CALT Learning Support staff member and identified as needing intensive support. For details see URL: http://www. Features include content. 5 . Student Support Students are able to access academic support provided by CALT (Centre for the Advancement of Learning and Teaching). the individual and class feedback.students may also be regularly provided with verbal feedback on important issues to be noted from teaching and learning materials.

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

P. Chapter 7 Carey. (2009). Financial Statement Analysis 7. P. (2009). P. Chapter 6 Carey. Financing the Business UNIT REVISION SWOT VAC EXAMS BEGIN Carey. (2009). Chapter 4 Carey. Chapter 1 Carey. (2009). Performance Measurement 8. Chapter 2 Carey. Adjusting the Accounts 5.Lecture program Date July 20 July 27 Aug 3 Topic 1. Cost Information for Internal Decision-Making 9. Concentrating on posting general Journal entries to the Ledger and Trial Balance Required Readings Carey. P. The Recording Process. P. Chapter 9 Carey. P. (2009). (2009). P. (2009). P. (2009). Chapter 3 Aug 10 Aug 17 Aug 24 Aug 31 Sept 7 Sept 14 Sept 21 Sept 28 Oct 5 Oct 12 Oct 19 Oct 26 Oct 2920 Nov 4. (2009). Chapter 5 Carey. Introduction to Accounting 2. P. (2009). (2009). Cash and Accrual Accounting and Statement of Cash Flows 3. Chapter 11 7 . P. Chapter 8 Carey. P. General Purpose Accounting Reports 6. Chapter 10 Carey. Budgeting and the Behavioural Implication of Accounting Information 10 Introduction to finance and financial mathematics 1 NON-TEACHING WEEK 11 Financial mathematics 2 12. (2009). P. Chapter 10 Carey.

Aug 31 6. Exercises: 11-1. 17. 4. Brief Exercises: 4-3. 12.8. Cash and Accrual Accounting and Statement of Cash Flows Chapter 4: Questions: 1. 14. Financial Statement Analysis Chapter 6: Questions 2. 2009) No Work Preparation required Chapter 1: Questions 1. 5. 6. The Recording Process. 5. 3. 7.11 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. Specific details relating to the timing will be discussed in lectures and tutorials. 48.17. 5-6.2. 1-7. 1-4. Concentrating on posting general Journal entries to the Ledger and Trial Balance Aug 17 4. Chapter 3: Problem 3. Problems: 4. 1-3. 3. 12. 6. 20. and posted on Blackboard unit website. 4. Brief Exercises: 3-2. Chapter 9: Questions 1. 5. 9. 2-3. 8 . 7. 5. 5-5.15. 7.4 Exercises: 2-1. 3. 18. Cost Information for Internal DecisionMaking 9.1 Aug 10 3. Budgeting and the Behavioural Implication of Accounting Information NON-TEACHING WEEK 10 Introduction to finance and financial mathematics 1 11 Financial mathematics 2 12. Chapter 10: Questions 37.3. 3-9. 3. 13. 42. Brief Exercises: 1-1. 38. 4. 25. 6. 4-7 Exercises: 4-3.. Exercises: 5-4.3. 12. 13. 3.1-10 Chapter 2: Questions 1. 2. 19. Introduction to Accounting Topic Required Preparation (Carey.13. 7. Adjusting the Accounts Chapter 3: Questions 2. Problems: 2. Chapter 7: Questions 1. 11-2. 6-2. 2.1. 11. Brief Exercises: 2. 27. Financing the Business UNIT REVISION Chapter 10: Questions 1.10. P. 4-4. 10. 11 Brief Exercises: 6-1. 3.1. Performance Measurement 8. Chapter 8: Questions 1. 3-5. 13. 6. 2. 8. 18. 43. 15. 2. 2. 50.2. 3-8. 15 Brief Exercises: 5-2. 24. 5. 28. 49. Chapter 11: Questions 3. 3. 3. 8. 7.Tutorial Program Date July 20 July 27 Aug 3 Orientation 1. 23. Sept 7 Sept 14 Sept 21 Sept 28 Oct 5 Oct 12 Oct 19 7. 10. 16. 6-7 Problems: 6-1. 11-5 Problems: 11-8.6 Aug 24 5. General Purpose Accounting Reports Chapter 5: Questions 3. 5. 6-8 Exercises: 6-4.5. 3.8 Problems: 5.10 Exercises: 3-1. 9. 16. 10.14. 41. 4.

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

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

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

format and the presentation and accuracy of the financial statements. Timing. 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. Students are required to answer the following questions from their textbook (chapters 7.5 marks) and evidence that students have attempted tutorial problems before class (2. 8. Assignment 1 integrates topics 1 to 5 of this unit. volume and pronunciation).5 marks). Fluency (speed. Each assignment is numbered.5. Participation will be judged by the tutor based on participation in tutorial discussion (2.au/publications/qmanual/. If you are late to enrol. Marks will be awarded based on transaction processing. This assessment is designed to test your achievement of Objectives 1 and 2. with a record being kept of which numbered assignment you receive. Ability to work as a team. closing entries. financial statements and a worksheet. eye contact). 12 . To receive this email you must be officially enrolled in this unit before the end of Week 2.edu.buseco. Appropriate use of body language (inc. Audience interest and response. 5 = High) on the following criteria: Knowledge and understanding of content.15% This is a task for each individual student. Using the unique series of business transactions (data) students will be required to record the transactions through the general journal and general ledger. Assessment Details Assignment 1 . You will receive your assignment via email in Week 3 of the semester. Students will be graded using a 5 point scale (1 = Low. Students will be awarded a maximum of 5 marks by their tutor for participation (Contributing 5% to final grade). & 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.15% This is a task for each individual student. Design and use of visual aids. prepare balance day adjustments. Each student’s assignment will contain a unique series of business transactions generated by a computer program. please contact your Lecturer in the week you enrol to receive your assignment. Assignment 2 . 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.monash.

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

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

25] To answer the questions below. 8. 5. What is a mutually exclusive project? Define the term Net Present Value (NPV).000 $54. Which nursery should the company expand and why? 7. what are the NPVs of expanding Nursery A and B? Show your workings.000 $53.000 $47. Gargorium is considering the expansion of two of its current nurseries. had production facilities for mobile devices and network infrastructure around the world.000 $50. At the end of 2007.2 billion (USD 10. is a key area of focus. The company’s optimistic estimate of the discount rate is 6%.000 $52. Based on the Form 20-F for 2007. driving the transformation and growth of the converging Internet and communications industries. Once you understand the specifics of the NPV technique.6 billion) and net profit was EUR 7. solutions and services for communications through Nokia Siemens Networks. We also provide equipment. business mobility and more. television. navigation.a. The estimated initial cost of expanding the nurseries and the subsequent increase in cashflows from the expansion is tabulated below: YEAR 0 1 2 3 4 5 6 7 NURSERY A -$300. 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. 2.000 $62. we employed 112 262 people. What is the NPV decision rule? Draw a timeline that depicts the cashflows for expanding Nursery A. Required 1. p. [Nokia Corporation. customer service and other operational units.000 $45. you can then use the financial maths skills you have developed to solve the numerical problems. Week 13: Nokia is the world leader in mobility. Developing and growing our offering of consumer Internet services. sales in more than 150 countries. 3. Form 20-F 2007. 6.000 $51.. 4.5 billion). Assuming a discount rate (interest rate) of 8% p.000 $49. games. video.000 The company considers the expansion of either Nursery A or B to be mutually exclusive. download Nokia‟s Form 20-F for 2007 from the web. and a global network of sales. Required 1. The discount rate of 8% is the company’s best guess based on the assumed risk of the projects.000 $56. Obtain one of these texts to teach yourself about the NPV technique. For 2007.000 NURSERY B -$250.000 $55. our net sales totaled EUR 51.000 $57. Which of the projects is more risky and why? 9.1 billion (USD 74.000 $60. as well as our enterprise solutions and software. We make a wide range of mobile devices with services and software that enable people to experience music. What is the discount rate that sets the NPV of expanding Nursery A to zero? Show your workings. how has Nokia performed in recent times? Be sure to highlight 15 .Gargorium Ltd. imaging. Which project should the company now choose and why? Show your workings. Recalculate the NPV for both projects using the optimistic discount rate. is a company that owns and operates nurseries.000 $58.

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

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

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