FIN 605: Financial Management (1.5 credits)
Spring, 2015
Instructor:
Dr. Yingying Shao
Office:
Stephens Hall 316F, Towson University
Office Hours: TuTh 9:00 -11:00AM, Tu 2:00PM - 4:00PM, or by appoint
Page 1 of 4
Case Analysis
Summary:
Jonathan Wydown founded Ceres Gardening Company- a leading player in the growing
organic gardening industry, selling seeds, small plants, and related items, in 1989.
Financial Statements Analysis
& Financial Planning
(Chapters 2 &3)
FIN 605
Key Concepts and Skills
Understand
the information provided by financial statements
Grasp the difference between accounting i
FIN 605
Homework 1
Hard copy due on Feb 3 before class.
Assignments will be graded on correctness as well as presentation. Due to the amount
of time given to complete the assignment, I expect high sco
Making Capital Investment Decisions
(Chapter 8)
FIN 605
Key Concepts and Skills
p
p
p
p
Determine the relevant cash flows for various types of capital
investments
Compute depreciation expense for tax
Stock Valuation
(Chapter 6)
FIN 605
Key Concepts and Skills
p
p
p
Comprehend that stock prices depend on future dividends and
dividend growth
Compute stock prices using the dividend growth model
Appre
Net Present Value
and Other Investment Rules
(Chapter 7)
FIN 605
Key Concepts
Compute and interpret an investments NPV and IRR
The advantages and disadvantages of each valuation
method specified above
Capital Budgeting
FIN605
Overview
p
What is capital budgeting?
n A process of evaluating potential investment projects
p
Decision criteria
n
n
n
n
n
NPV
IRR
MIRR
Profitability Index
Payback, discounte
Chapter 3: Decision trees and real options
Sample Problems (end-of-chapter problems: 9-6, 23&24)
6.
We need to calculate the NPV of the two options, go directly to market now, or utilize test marketin
Capital Budgeting
- Risk Analysis
FIN625
Introducing Uncertainty
p
Sensitivity Analysis
n
n
n
p
Using Data Table
Make small changes in different variables, one at a time,
and observe the effect on the
Real Options
FIN 625
Real Options
p
p
p
Real options exist when managers can influence the size and
risk of a projects cash flows by taking different actions during
the projects life in response to ch
Financial Statements Analysis
& Financial Planning
(Chapters 2 &3)
FIN 605
Key Concepts and Skills
p
p
p
p
Understand the information provided by financial statements
Grasp the difference between acco
Stock Valuation
(Chapter 6)
FIN 605
Key Concepts and Skills
omprehend that stock prices depend on future dividends and
dividend growth
ompute stock prices using the dividend growth model
ppreciate the
Making Capital Investment Decisions
(Chapter 8)
FIN 605
Key Concepts and Skills
etermine the relevant cash flows for various types of capital
investments
ompute depreciation expense for tax purposes
n
FIN625
Capital Budgeting (Excel Modeling)
From Sakai, download the Excel model that illustrates the details of cash flow analysis for the
following capital budgeting.
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