This course, designed for non-finance students, covers basic principles of financial management in business. It provides students with a scientific framework for evaluating assets and investment opportunities. The course is divided into three parts. The first part discusses about the institutional settings and the relationship among different players in the financial markets. The second part focuses on capital budgeting. Here, different types of investment evaluation techniques will be discussed and compared. The last part discusses the determinants of the cost of capital – a key variable of capital budgeting.

CILO-1: Define the primary goal of a business and the agency problem encountered by a corporation. CILO-2: Recognize the primary functions of financial markets and financial institutions. CILO-3: Explain how the value of a project is associated with the size, timing and uncertainty of its cash flows. CILO-4: Calculate the value of various financial securities such as stocks and bonds, using the discounted cash flow method. CILO-5: Identify and estimate cash flows that are relevant to a project, including its operating activities, net working capital and capital spending. CILO-6: Measure risk and return and explain the trade-off between risk and return. CILO-7: List the primary sources of capital, explain the methods of calculating the costs of various sources of capital and incorporate the costs in capital budgeting analysis.