Faculty of Management Sciences
Learning Guide 2015 Second
Semester
Subject: Project Accounting IV Subject Code: PKA42AB Programme:B-Tech: Project Management
Programme Code: BEBBTPJ NQF level: 7 Credits: 12 Compiled by: P.K. Hoeyi
Department of Business Support Studies Faculty of Management Sciences Building
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Table of Contents
COURSE INFORMATION ... 3
LEARNING ASSUMED TO BE IN PLACE ... 4
LEARNING OUTCOMES FOR THE COURSE ... 4
CRITICAL OUTCOMES ... 4 ASSESSMENT CRITERIA ... 4 METHODS OF ASSESSMENT ... 4 WELCOME ... 5 PRESCRIBED READING ... 5 RECOMMENDED READING ... 5 GROUP ASSIGNMENT ... 5 WARNING: ... 6 SYLLABUS ... 7
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COURSE INFORMATION
INSTRUCTIONAL OFFERING PROJECT ACCOUNTING IV
SUBJECT CODE PKA42AB
EXAMINATION DATE 2015 SECOND SEMESTER
CREDITS 12
NQF LEVEL 7
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LEARNING ASSUMED TO BE IN PLACE
At least NQF level six.
LEARNING OUTCOMES FOR THE COURSE
Upon completion of this course, the candidate will provide evidence that he/she knows, understands, and can apply managerial accounting concepts and tools covered.
CRITICAL OUTCOMES
Candidates will:
1. Identify and solve problems using critical and creative thinking (i.e. problem-solving skills); 2. Collect, analyse, organise and critically evaluate information (i.e. research skills);
3. Organise and manage themselves and their activities responsibly and effectively (i.e. self-responsibility skills);
4. Communicate effectively using visual, symbolic and/or language skills in various modes.
ASSESSMENT CRITERIA
Candidates display knowledge and understanding of selected accounting, budgeting and costing concepts and tools and can apply these correctly in making business decisions.
METHODS OF ASSESSMENT
1. Course mark (40% of final mark):
(a) Formal group assignments and tests addressing the critical outcome areas identified above. (b) You must obtain a course mark of at least 40% to be admitted to the exam
2. Exam mark (60% of final mark):
(a) A formal 3 hours examination (that counts 60% of the final mark) addressing the specific outcome areas identified.
(b) You need a minimum 50% final mark to pass a course
(c) If you fail to obtain the required pass mark, you need a minimum 45% final mark to qualify for supplementary exams
(d) A final mark of 75% or more is required to pass a course with distinction (e) Final mark = [Course mark (40%)] + [Exam mark (60%)]
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WELCOME
The nature of the course is such that there is no single textbook that can cover the specific outcomes. Whilst an attempt has been made to provide you with a prescribed book and annexure, it remains the responsibility of the learner to get more reading materials, especially those in the recommended reading list. Secondly, it must be clearly noted that no student is permitted to use illegally copied material in class. Some exams and tests may be open book and students can only use original books.
PRESCRIBED READING
Corporate Finance: A South African Perspective, 2nd Edition, 2014, ISBN 9780195989830
Du Toit et al. Oxford
University Press
RECOMMENDED READING
Introduction to Managerial Accounting, 5th Edition 2010, ISBN-13 9780073527079
Brewer, Garrison, Noreen McGraw-Hill
Principles of accounting and finance Davies & Boczk McGraw-Hill
Principles of financial management Posthumus et al Juta
Finance for non-financial managers Marx NAE
Managerial accounting Garrison et al McGraw-Hill
GROUP ASSIGNMENT
This assignment must be done strictly in groups of three (3), four (4) or five (5) students and submitted by the deadline stated below.
1. Based on your understanding of the goals of financial management, (a) Explain the principal-agent problem (10 marks)
(b) Discuss five measures you would put in place to combat this problem in your company (20 marks)
2. Discuss five main purposes for which people use the financial system (financial markets). (20 MARKS)
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KEY MOMENTS
Activity Due/Submission Date Time Venue
Group Assignment 21st August 2015 1.00pm B106
Individual Assignment 3rd September 2015 5.00pm B020/B106
Class Test 17th September 2015 5.15pm B020/B106
Sick Test 2nd October 2015 10.00am To be announced
Second Semester Main Exam Begins
24th October 2015
WARNING:
(a) You must follow correct protocol when lodging complaints (b)You must follow correct academic writing procedures.
(c) You will be severely punished for plagiarism. In the worst case of plagiarism, the result will be a zero mark.
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SYLLABUS
Part 1 SPECIFIC OUTCOME ASSESSMENT CRITERIA Credits Notional
hours Weeks Intr o du ct o ry co ncept s UNIT 1
Learners will understand: 1. What corporate finance
is
2. The goals of financial management
3. The corporate forms of business
4. The agency problem 5. Financial markets and
institutions 6. Corporate governance and ethics Required Readings: Du Toit et al: Ch 1 Brewer et al: Ch 1 Davies & Boczko Ch 1
The ability to:
1.Explain the role of corporate financial management and the role and
responsibilities of the financial manager 2.Review the three types of corporate
financial management decisions and identify the main goal of financial management
3.Describe the different corporate forms of business
4.Discuss the agency problem and agency cost
5.Understand the functions of financial markets and institutions, and the role of corporate governance and business ethics.
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Part 2
SPECIFIC OUTCOME ASSESSMENT CRITERIA Credits Notional
hours Weeks F ina ncia l ma na g ement ba sic s UNIT 2
Learners will understand: 1. The objectives of
financial statements 2. Who are the users of
financial statements 3. Requirements for financial statements 4. The standardization of financial statements 5. Statement of financial position 6. Statement of comprehensive income 7. Statement of cash flows
Required readings:
Du Toit et al. Ch 2
Brewer et al Ch 2 pp. 38-41
The ability to:
1. Discuss the objectives and requirements of financial statements
2. Identify the users of financial statements 3. Identify the components included in the
main types of financial statements 4. Distinguish between the three main types
of financial statements
5. Describe the formats of a statement of financial position, statement of
comprehensive income and statement of cash flows. 3 30 3 UNIT 3 To understand: 1. Requirements for financial ratios 2. Norms of comparison 3. Types of ratios 4. Financial gearing 5. DuPont Analysis Required readings: Du Toit et al. Ch 3 Marx Ch 2 Brewer et al Ch 14
The ability to:
1. Discuss the requirements for financial ratios
2. Identify the norms of comparison used to evaluate ratios
3. Identify the different types of ratios 4. Define, calculate and interpret
profitability, liquidity, solvency, cash flow and investment ratios
5. Explain financial gearing
6. Apply the DuPont Analysis system to evaluate return ratios.
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UNIT 4
To understand:
1. Interest rates
2. Future value and compounding of lump sums 3. Compounding interest more frequently than annually 4. Nominal and effective interest rates
5. Present value and discounting
6. Valuing annuities and perpetuities
Required Readings:
Du Toit et al. Ch 4
The ability to:
1. Use various computation tools to analyse the role of time value in finance
2. Calculate, interpret and explain the future value and present value of single amounts or lump sums, and investigate the relationship between them
3. Calculate, interpret and explain the future and present value of annuities (ordinary annuities and annuities due)
4. Calculate, interpret and explain the present value of a perpetuity 5. Calculate and interpret the present
value and future value of a mixed stream of cash flows
6. Calculate the present value, future value, interest rate and time period using discounting and compounding principles.
10 UNIT 5 To understand: 1. The importance of efficient investment appraisal 2. Types of investment projects
3. The average return method
4. The discounted payback period method
5. The net present value method
6. The internal rate of return method 7. Modified internal rate of return 8. The profitability index Required Readings: Du Toit et al. Ch 5 Brewer et al. Ch 12
The ability to:
1. Understand the importance of the investment appraisal process
2. Distinguish between the different types of investment projects
3. Calculate, interpret and evaluate the average return method
4. Calculate, interpret and evaluate the payback period method
5. Calculate, interpret and evaluate the discounted payback period method
6. Calculate, interpret and evaluate the net present value method
7. Calculate, interpret and evaluate the internal rate of return method.
8. Define, construct and interpret a net present value profile graph
9. Calculate, interpret and evaluate the modified internal rate of return method
10. Calculate, interpret and evaluate the profitability index method
11. Understand why ranking investment proposals on the basis of the net present value and internal rate of return methods may lead to conflicting rankings.
