AF6021 - Financial Appraisal, Risk and Value Management

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What will I learn on this module?

The module aims to provide you with the knowledge and skills of applying a variety of investment appraisal tools to support decision making in corporate finance. We also examine the notion of risk and value management in the context of large publicly owned organisations. All financial techniques which you will study as part of this module will be illustrated in practical terms. The module is delivered to you using weekly lectures and seminars.


Within this module, you will cover 9 main topics:

• Drivers of Corporate Value
• NPV sensitivity analysis
• Calculations of cost of equity and debt
• Capital structure and cost of capital
• Share valuations
• Dividend policy
• Market efficiency
• Introduction to portfolio theory
• Corporate cash holdings

The module will lead you to the development of basic analytical skills and confidence in handling numeric data using both mathematical derivations and Excel. In doing so, it will expose you to a wide range of financial techniques for use in analysis and interpretation of investment appraisal problems. You will become aware of the role of financial manager in the context of large publically owned organisations.

On completing the module you will be able to select and apply the appropriate financial techniques to support financial appraisal and decision making in a variety of situations. You will have developed relevant numerical skills to support the theoretical material introduced throughout the module. You will create, use and design appropriate spreadsheet models which directly relate to the concepts studied.

How will I learn on this module?

The weekly lectures will provide you with a theoretical underpinning of the module content, supported by weekly seminars which will give you an opportunity to practice the various financial techniques, allowing you to build up a proficiency in the use of financial techniques and the necessary skills of interpretation and communication.

There will be a number of additional exercises housed on the module’s e-learning portal that will permit you to undertake further practice independently. The module has a supporting reading list that provides you with an opportunity to see how the various financial decision making and investment appraisal techniques are applied to enhance shareholder wealth.

Your directed study will support the work you have undertaken in the contact sessions. You will be expected to keep up-to-date with your seminar exercises. In addition, you will be set a selection of exercises to complete in your own time.
Independent learning time is set aside for learning activities, self-identified by you, to gain a deeper and broader knowledge of the subject. You may complete the review exercises, work with the electronic support tools (such comprehensive and detailed answers to seminar questions and recordings of lectures), and undertake further reading.
The problem solving nature of the means that tutor (formative) feedback will be received continuously.

How will I be supported academically on this module?

Support will be provided to you by a member of academic staff leading the module and providing the lecture input. A team of academic staff are allocated to small seminar groups. This provides a closer, more personal academic support.

Your module is supported by an e-learning portal, which houses lecture materials, seminar exercises and answer files, alongside assessment details and various support facilities such as recordings of certain lectures and access to various online sources relevant to the course.

You will be provided with a wide-ranging electronic reading list that comprises of various academic reports, conference papers and journal articles that showcase the application of various financial techniques presented in the module.

Assessment will be by a three hour closed book exam which will be made up of multiple choice questions to test broader understanding of the module content, and four computational questions covering specific financial techniques studied herewith.

What will I be expected to read on this module?

All modules at Northumbria include a range of reading materials that students are expected to engage with. The reading list for this module can be found at: http://readinglists.northumbria.ac.uk
(Reading List service online guide for academic staff this containing contact details for the Reading List team – http://library.northumbria.ac.uk/readinglists)

What will I be expected to achieve?

Knowledge & Understanding:
• Understand a variety of investment appraisal techniques and their application to the analysis and interpretation of financial problems (MLO1).
• Understand and demonstrate the role of financial techniques as an aid to decision making; through the selection of financial tools and techniques to assist in the solution of financial problems (MLO2).

Intellectual / Professional skills & abilities:
• Evidence skills in the handling of financial data and the corresponding findings of its analysis and modelling for progression to more advanced contexts (MLO3).

Personal Values Attributes (Global / Cultural awareness, Ethics, Curiosity) (PVA):

How will I be assessed?

100% of the mark for the module will be derived from a closed book exam (plus 15 mins reading time) which will be made up of multiple choice questions to test broader understanding of the module content, and four computational questions covering specific financial techniques studied herewith (MLO1, MLO2 & MLO3).

Additionally, you will be continuously assessed in formative terms during seminars which will always incorporate pre-work based on preceding week’s lecture material. Your seminar tutor will give you feedback on that preparation.

Pre-requisite(s)

None

Co-requisite(s)

None

Module abstract

Recent financial turbulence has taught us that there are companies which are managed well and there are companies which are managed badly. Discerning one form the other is critical to stability of modern economies. From the financial perspective, the key difference has been in the way mangers view the trade-off between risk and return. After studying this module, you will be able to make an informed judgement on which investment projects firms should go for and which ones they should reject; what is a sensible level of debt and what impact capital structure has on the required rate of return. Having completed this module you will be fully equipped to contribute to the practical problems that financial managers are faced with as well as engage in an academic debate revolving around theoretical underpinnings behind the studies concepts.

Course info

UCAS Code N400

Credits 20

Level of Study Undergraduate

Mode of Study 3 years full-time or 4 years with a placement (sandwich)/study abroad

Department Newcastle Business School

Location City Campus, Northumbria University

City Newcastle

Start September 2020

Fee Information

Module Information

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