EFN507 Advanced Capital Budgeting
To view more information for this unit, select Unit Outline from the list below. Please note the teaching period for which the Unit Outline is relevant.
| Unit code: | EFN507 |
|---|---|
| Prerequisite(s): | EFN412 |
| Equivalent(s): | EFX507 |
| Credit points: | 12 |
| Timetable | Details in HiQ, if available |
| Availabilities |
|
| Domestic tuition unit fee | $4,416 |
| International unit fee | $4,944 |
Unit Outline: Semester 2 2025, Gardens Point, Internal
| Unit code: | EFN507 |
|---|---|
| Credit points: | 12 |
| Pre-requisite: | EFN412 |
| Equivalent: | EFX507 |
| Coordinator: | Daniel Smith | d4.smith@qut.edu.au |
Overview
Capital budgeting is an important aspect of a firm's financial management. As capital budgeting concerns the firm's long-lived assets, decisions made in this area are likely to impact upon the firm well into the future and have much to do with its long-term performance. This unit builds on the foundational finance knowledge, extending it to the context of making capital budgeting decisions.
Learning Outcomes
On successful completion of this unit you will be able to:
- Analyse complex real world situations and select appropriate capital budgeting techniques taking into account the benefits and limitations of each technique;
- Apply capital budgeting theories and technical skills for decision making in conditions of certainty and uncertainty;
- Identify and discuss the complexities of corporate capital budgeting decisions and also empirical evidence relating to the corporate decisions.
Content
The focus of this course is to provide a greater understanding of corporate finance theory and further insights into how the corporate finance theory applies in the real world. Successful completion of this course enhances students' ability to apply the knowledge and the tools in corporate decisions, such as cash flow forecasting, financing decisions, project valuation, etc., and to construct written work on capital budgeting that is logically and professionally presented.
This unit addresses the following topics:
- Overview of capital budgeting
- Investment decisions (Time value of money, Capital investment decisions)
- Capital structure decisions
- Financial options
- Real options
- Payout policy (Dividend policy, Share repurchase)
- Raising capital
- Mergers and acquisitions and corporate restructuring
- Corporate governance
Course Assurance of Learning Goals (Postgraduate)
The Faculty of Business has established the Assurance of Learning (AOL) Goals to meet contemporary industry needs and standards. Achieving these learning outcomes will assist you to meet the desired graduate outcomes set at QUT - aligned with other internationally renowned business schools. Students will develop the following capabilities relevant to a contemporary global and sustainable business environment:
Have knowledge and skills pertinent to a particular discipline (KS)
1.1 Well-researched knowledge and critical understanding applied to issues at the forefront of a specialised discipline area
1.2 Ability to select and use effectively a range of tools and technologies to locate and/or generate information appropriate to the disciplinary context
Be critical thinkers and effective problem solvers (CTA)
2.1 Apply logical, critical and creative thinking and judgement to generate appropriate solutions to problems in the disciplinary context
Be professional communicators in an intercultural context (PC)
3.1 Ability to create and present professional documents and/or reports using high levels of analysis/synthesis/evaluation for a range of contexts and audiences
3.2 Ability to orally communicate and justify ideas and information, at a professional level, for a variety of contexts and audiences, including peers and discipline specialists
Be able to work effectively in a Team Environment (TW)
4.1 Operate effectively and with flexibility to achieve common goals in collaborative settings, using a range of skills, including leadership, negotiation, reflection, proactivity and support for team members
Have a Social and Ethical Understanding (SEU)
5.1 Apply knowledge of the ethical, social and cultural dimensions relevant to business situations, including appropriate standards or codes of practice, to provide courses of action
Learning Approaches
The unit is a combination of formal 2-hour lectures and 1-hour tutorials. Lectures will involve covering both theoretical and applied aspects of capital budgeting. The lectures also provide numerical examples and real-world examples to demonstrate the applications of the theories. In tutorials, students will undertake a range of activities, including solving problems and case studies. Tutorial tasks and activities are designed to assist students to apply contents from lectures to practical examples. Students will be expected to prepare for the class by reading the assigned materials and working through assigned tutorial questions. In addition, students are encouraged to participate in class discussions.
COVID-19 restrictions may require changes to the planned Learning Approaches described here. Students should refer to the unit Canvas site for the latest information.
Feedback on Learning and Assessment
Students will receive feedback in various forms throughout the semester which may include:
- Informal: worked examples, such as verbal feedback in class, personal consultation
- Formal: in writing, such as checklists (e.g. criteria sheets), written commentary
- Direct: to individual students, either in written form or in consultation
- Indirect: to the whole class
Assessment
Overview
Assessment Submission and Extensions
Assessment items submitted after the due date without an approved extension will not be marked and will receive a grade of 1 or 0%. If special circumstances prevent you from meeting the assessment due date, you can apply for an extension http://www.student.qut.edu.au/studying/assessment/extension. If you don't have an approved extension you should submit the work you have done by the due date and it will be marked against the assessment criteria. QUT's assessment submission requirements reflect the expectations of professional practice where you will need to meet deadlines.
Unit Grading Scheme
7- point scale
Assessment Tasks
Assessment: Problem Solving Task and Essay (Case Study)
One assignment containing a mix of a practical calculation task and a theoretical essay component.
This assignment is eligible for the 48-hour late submission period and assignment extensions.
Formative or Summative: Formative and Summative
Assessment: Mid-Semester Exam
The questions will cover all materials from Week 1 to Week 6.
Formative or Summative: Summative
Assessment: Final Exam
The questions will cover all unit materials.
Formative or Summative: Summative
Academic Integrity
Academic integrity is a commitment to undertaking academic work and assessment in a manner that is ethical, fair, honest, respectful and accountable.
The Academic Integrity Policy sets out the range of conduct that can be a failure to maintain the standards of academic integrity. This includes, cheating in exams, plagiarism, self-plagiarism, collusion and contract cheating. It also includes providing fraudulent or altered documentation in support of an academic concession application, for example an assignment extension or a deferred exam.
You are encouraged to make use of QUT’s learning support services, resources and tools to assure the academic integrity of your assessment. This includes the use of text matching software that may be available to assist with self-assessing your academic integrity as part of the assessment submission process.
Breaching QUT’s Academic Integrity Policy or engaging in conduct that may defeat or compromise the purpose of assessment can lead to a finding of student misconduct (Code of Conduct – Student) and result in the imposition of penalties under the Management of Student Misconduct Policy, ranging from a grade reduction to exclusion from QUT.
Resources
Resource Materials
Prescribed text(s)
Brealey, Myers and Allen (2020) Principles of Corporate Finance, 13th Edition, McGraw Hill.
Risk Assessment Statement
There are no out-of-the-ordinary risks associated with lectures or tutorials in this unit. You should, however, familiarise yourself with evacuation procedures operating in the buildings in which you attend classes and take the time to
view the Emergency video.
Standards/Competencies
This unit is designed to support your development of the following standards\competencies.
QUT Business Capabilities (Postgraduate)
HO (2.1): Critical Analysis
Relates to: ULO1, ULO2, ULO3, Problem Solving Task and Essay (Case Study), Mid-Semester Exam, Final Exam
HO (2.2): Independent Judgement and Decision-Making
Relates to: ULO2, Problem Solving Task and Essay (Case Study), Mid-Semester Exam, Final Exam
KS (1.1): Discipline and Professional Practice Knowledge
Relates to: ULO2, ULO3, Problem Solving Task and Essay (Case Study), Mid-Semester Exam, Final Exam
KS (1.2): Technical, Technological and Research Skills
Relates to: ULO1, ULO2, Problem Solving Task and Essay (Case Study), Mid-Semester Exam, Final Exam
Course Learning Outcomes
This unit is designed to support your development of the following course/study area learning outcomes.BS11 Master of Business
- Demonstrate and apply integrated and advanced discipline and professional practice knowledge, including knowledge of relevant research principles and methods.
Relates to: ULO2, ULO3 - Apply technical, technological and technical research skills to organise and interpret discipline knowledge, including theory and practice, to investigate business issues.
Relates to: ULO1, ULO2 - Critically investigate real world business issues and problems drawing on analysis, evaluation and synthesis of discipline knowledge, including theory and practice.
Relates to: ULO1, ULO2, ULO3 - Exercise creativity and intellectual independence and make informed decisions and judgements in planning, designing, and executing strategic and research-based responses to address real world issues and problems.
Relates to: ULO2
Unit Outline: Semester 2 2025, Online
| Unit code: | EFN507 |
|---|---|
| Credit points: | 12 |
| Pre-requisite: | EFN412 |
| Equivalent: | EFX507 |
Overview
Capital budgeting is an important aspect of a firm's financial management. As capital budgeting concerns the firm's long-lived assets, decisions made in this area are likely to impact upon the firm well into the future and have much to do with its long-term performance. This unit builds on the foundational finance knowledge, extending it to the context of making capital budgeting decisions.
Learning Outcomes
On successful completion of this unit you will be able to:
- Analyse complex real world situations and select appropriate capital budgeting techniques taking into account the benefits and limitations of each technique;
- Apply capital budgeting theories and technical skills for decision making in conditions of certainty and uncertainty;
- Identify and discuss the complexities of corporate capital budgeting decisions and also empirical evidence relating to the corporate decisions.
Content
The focus of this course is to provide a greater understanding of corporate finance theory and further insights into how the corporate finance theory applies in the real world. Successful completion of this course enhances students' ability to apply the knowledge and the tools in corporate decisions, such as cash flow forecasting, financing decisions, project valuation, etc., and to construct written work on capital budgeting that is logically and professionally presented.
This unit addresses the following topics:
- Overview of capital budgeting
- Investment decisions (Time value of money, Capital investment decisions)
- Capital structure decisions
- Financial options
- Real options
- Payout policy (Dividend policy, Share repurchase)
- Raising capital
- Mergers and acquisitions and corporate restructuring
- Corporate governance
Course Assurance of Learning Goals (Postgraduate)
The Faculty of Business has established the Assurance of Learning (AOL) Goals to meet contemporary industry needs and standards. Achieving these learning outcomes will assist you to meet the desired graduate outcomes set at QUT - aligned with other internationally renowned business schools. Students will develop the following capabilities relevant to a contemporary global and sustainable business environment:
Have knowledge and skills pertinent to a particular discipline (KS)
1.1 Well-researched knowledge and critical understanding applied to issues at the forefront of a specialised discipline area
1.2 Ability to select and use effectively a range of tools and technologies to locate and/or generate information appropriate to the disciplinary context
Be critical thinkers and effective problem solvers (CTA)
2.1 Apply logical, critical and creative thinking and judgement to generate appropriate solutions to problems in the disciplinary context
Be professional communicators in an intercultural context (PC)
3.1 Ability to create and present professional documents and/or reports using high levels of analysis/synthesis/evaluation for a range of contexts and audiences
3.2 Ability to orally communicate and justify ideas and information, at a professional level, for a variety of contexts and audiences, including peers and discipline specialists
Be able to work effectively in a Team Environment (TW)
4.1 Operate effectively and with flexibility to achieve common goals in collaborative settings, using a range of skills, including leadership, negotiation, reflection, proactivity and support for team members
Have a Social and Ethical Understanding (SEU)
5.1 Apply knowledge of the ethical, social and cultural dimensions relevant to business situations, including appropriate standards or codes of practice, to provide courses of action
Learning Approaches
The unit is a combination of formal 2-hour lectures and 1-hour tutorials. Lectures will involve covering both theoretical and applied aspects of capital budgeting. The lectures also provide numerical examples and real-world examples to demonstrate the applications of the theories. In tutorials, students will undertake a range of activities, including solving problems and case studies. Tutorial tasks and activities are designed to assist students to apply contents from lectures to practical examples. Students will be expected to prepare for the class by reading the assigned materials and working through assigned tutorial questions. In addition, students are encouraged to participate in class discussions.
COVID-19 restrictions may require changes to the planned Learning Approaches described here. Students should refer to the unit Canvas site for the latest information.
Feedback on Learning and Assessment
Students will receive feedback in various forms throughout the semester which may include:
- Informal: worked examples, such as verbal feedback in class, personal consultation
- Formal: in writing, such as checklists (e.g. criteria sheets), written commentary
- Direct: to individual students, either in written form or in consultation
- Indirect: to the whole class
Assessment
Overview
Assessment Submission and Extensions
Assessment items submitted after the due date without an approved extension will not be marked and will receive a grade of 1 or 0%. If special circumstances prevent you from meeting the assessment due date, you can apply for an extension http://www.student.qut.edu.au/studying/assessment/extension. If you don't have an approved extension you should submit the work you have done by the due date and it will be marked against the assessment criteria. QUT's assessment submission requirements reflect the expectations of professional practice where you will need to meet deadlines.
Unit Grading Scheme
7- point scale
Assessment Tasks
Assessment: Problem Solving Task and Essay (Case Study)
One assignment containing a mix of a practical calculation task and a theoretical essay component.
This assignment is eligible for the 48-hour late submission period and assignment extensions.
Formative or Summative: Formative and Summative
Assessment: Mid-Semester Exam
The questions will cover all materials from Week 1 to Week 6.
Formative or Summative: Summative
Assessment: Final Exam
The questions will cover all unit materials.
Formative or Summative: Summative
Academic Integrity
Academic integrity is a commitment to undertaking academic work and assessment in a manner that is ethical, fair, honest, respectful and accountable.
The Academic Integrity Policy sets out the range of conduct that can be a failure to maintain the standards of academic integrity. This includes, cheating in exams, plagiarism, self-plagiarism, collusion and contract cheating. It also includes providing fraudulent or altered documentation in support of an academic concession application, for example an assignment extension or a deferred exam.
You are encouraged to make use of QUT’s learning support services, resources and tools to assure the academic integrity of your assessment. This includes the use of text matching software that may be available to assist with self-assessing your academic integrity as part of the assessment submission process.
Breaching QUT’s Academic Integrity Policy or engaging in conduct that may defeat or compromise the purpose of assessment can lead to a finding of student misconduct (Code of Conduct – Student) and result in the imposition of penalties under the Management of Student Misconduct Policy, ranging from a grade reduction to exclusion from QUT.
Resources
Resource Materials
Prescribed text(s)
Brealey, Myers and Allen (2020) Principles of Corporate Finance, 13th Edition, McGraw Hill.
Risk Assessment Statement
There are no out-of-the-ordinary risks associated with lectures or tutorials in this unit. You should, however, familiarise yourself with evacuation procedures operating in the buildings in which you attend classes and take the time to
view the Emergency video.
Standards/Competencies
This unit is designed to support your development of the following standards\competencies.
QUT Business Capabilities (Postgraduate)
HO (2.1): Critical Analysis
Relates to: ULO1, ULO2, ULO3, Problem Solving Task and Essay (Case Study), Mid-Semester Exam, Final Exam
HO (2.2): Independent Judgement and Decision-Making
Relates to: ULO2, Problem Solving Task and Essay (Case Study), Mid-Semester Exam, Final Exam
KS (1.1): Discipline and Professional Practice Knowledge
Relates to: ULO2, ULO3, Problem Solving Task and Essay (Case Study), Mid-Semester Exam, Final Exam
KS (1.2): Technical, Technological and Research Skills
Relates to: ULO1, ULO2, Problem Solving Task and Essay (Case Study), Mid-Semester Exam, Final Exam
Course Learning Outcomes
This unit is designed to support your development of the following course/study area learning outcomes.BS11 Master of Business
- Demonstrate and apply integrated and advanced discipline and professional practice knowledge, including knowledge of relevant research principles and methods.
Relates to: ULO2, ULO3 - Apply technical, technological and technical research skills to organise and interpret discipline knowledge, including theory and practice, to investigate business issues.
Relates to: ULO1, ULO2 - Critically investigate real world business issues and problems drawing on analysis, evaluation and synthesis of discipline knowledge, including theory and practice.
Relates to: ULO1, ULO2, ULO3 - Exercise creativity and intellectual independence and make informed decisions and judgements in planning, designing, and executing strategic and research-based responses to address real world issues and problems.
Relates to: ULO2