Module 1 - 2 3 4 1000 Study Guide and Resource Manual 51...

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1000 1000 1000 1 2 3 0 2 3 4 5 0 1 2 3 4 5 100 100 100 100 100 100 100 100 100 Normal Due Deferred 1 Study Guide and Resource Manual Equation Section 1Module 1: Introduction to Finance Learning Objectives On completing this module you should be able to: Define finance, financial management, and the role of the finance manager; Understand the “finance way of thinking”; Explain the role of the objective of “maximising value”; Understand and explain the concept of the time value of money; Calculate present and future values, Understand the various interest rate definitions, and Explain the role of the capital market. You should also refer to the list of objectives, which appear at the beginning of each chapter of the set text. Required Reading Textbook Peirson, Brown, Easton, Howard, and Pinder, Business Finance , 10 th edition, McGraw-Hill, 2009 [PBEHP] Chapter 1 read and study all sections. Chapter 2 read lightly. Chapter 3 read and study to the end of section 3.4.2. Chapter 8 read and study lightly all sections. Useful Web Sites www.rba.gov.au www.national.com.au www.stgeorge.com.au www.commbank.com.au www.anz.com.au www.asx.com.au www.valueline.com www.apra.gov.au Chapter eight of PBEHP also includes some interesting web sites.
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Your Library The QUT library can provide you with access to various dictionaries, glossaries and databases online. Search the Internet Looking for a definition, for an alternative explanation, for data or for information, search the internet on your favourite search engine.
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3 Study Guide and Resource Manual Topic 1.1: What is Financial Management? Financial Decisions Financial management is concerned with developing analytical skills to help managers make better financial decisions. These financial decisions are: 1. The Investment Decision: The evaluation of investment projects – what projects to invest in? This process is sometimes called “Capital Budgeting”. 2. The Financing Decision: Where to obtain funds from -The type of funds - The cost of funds - When to raise funds - How much? 3. The Dividend Decision: Increase or decrease – how much to pay out - availability of cash to payout – dividends or capital gains. (The Dividend Decision is sometimes viewed as part of the Financing Decision) The investment, financing and dividend decisions are linked by the flow of cash though the firm. These decisions are interrelated in the following way: Cash Inflows = Cash Outflows The main sources of funds are from raising new capital by borrowing or by the issue of new equity, and the net cash flows from operations. So we divide them into external funding and internal funding. Uses of funds are divided into investments and dividends. New Funds
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Module 1 - 2 3 4 1000 Study Guide and Resource Manual 51...

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