International Finance and Accountin

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1 Course code: MBIB-INTFIN-14 Academic year: Period A Obligatory course Full-time conceptual course Course coordinator: Farah Iranpour Author: Farah Iranpour Room: 1.107, tel: (0) , farah.iranpour@hu.nl Date: 31/08/2014 Hogeschool Utrecht: University of Applied Sciences Utrecht Utrecht, 2011 This material is subject to copyright. Copies for own or internal use are permitted. International Finance and Accountin Hogeschool Utrecht: University of Pr Utrecht, 2007 This material is subject to copyright. Copies for own or internal use are perm

2 Contents 1 Course Description 2 2 Course Goals and Learning Objectives 2 3 Place in the Curriculum and Related Courses 3 4 Study Burden 3 5 Pre-requisites 3 6 Exemption Possibilities 3 7 Competencies 4 8 Didactic Forms 4 9 Assessment 4 10 Course Material and Literature 5 11 Course Evaluation 6 1 Course Description International Finance and Accounting, offers an introduction over the various functions of the finance division in a multinational firm. The goal of the course is to help a general manager understand how international financial issues might impact his performance and decision making processes. The course also focuses on the managerial problems that develop for a multinational firm that is operating abroad, including country risk. Finally, the course will also discuss current events that impact global business management today. For International Finance and Accounting topics include: foreign exchange exposure, foreign exchange and international cash management techniques, derivative management tools and international accounting, both short term and long term lending and borrowing in a foreign environment, international cash management, international project appraisals and international acquisitions. The course also focuses on the managerial problems that develop for a multinational firm that is operating abroad, including country risk. What you learn in Finance sometimes seems far away from your own world. The terms are new, the formulas may seem difficult, and the concepts do not seem to apply to anything you have ever heard about. That is why we include cases in order to give context to the course. The cases address all relevant concepts and stress the relevance of the content of the course for the real business practice. 2 Course Goals and Learning Objectives At the end of the course, you do the following: 1. recognize the relevant aspects of the current international financial environment and markets, describe the most important developments in the current international financial environment and markets and explain the effects of the events in the current international financial environment and markets on international trade 2. describe the consequences of the various risks inherent in international business and if possible to make suggestions to avoid them or how to confront them. 3. recognize and account for, exchange rate risk management techniques like forwards, futures, options, and money market hedges 4. follow exchange rate behavior and its effect on economic, transactional and translational exposure 5. define corporate strategy in an international environment via this course and its interaction with the Intopia project 6. explain the operational interactions and the interdependence of the various functions in an international firm, and how they all achieve the overall goals and objectives of an international firm. 2/6

3 7. work analytically, 8. write problem solving reports that critically assess the solution you offer. 9. make suggestions to management with regard to your finding 10. be aware of current international business news and events that impact international financial management 11. explain why specific international business news and events are relevant for international financial management 12. explain which is the impact of current developments on international financial management. 13. can interpret financial statements 14. can work accurately and under pressure 15. stick to deadlines. You will also be able to: 1. Describe common motives for MNC s for initiating direct foreign investment (DFI) 2. Illustrate the benefits of international diversification for an MNC 3. Compare the capital budgeting analysis of an MNCs (Multinational Corporations) subsidiary versus its parent 4. Demonstrate how multinational capital budgeting can be applied to determine whether an international project should be implemented 5. Explain how the risk of international projects can be assessed 6. Provide a background on how MNCs use international acquisitions as a form of multinational restructuring 7. Identify other types of multinational restructuring, besides national acquisitions 8. Identify the common factors used by MNCs to measure a country s political and financial risk 9. Explain the techniques used to measure country risk 10. Explain how MNCs use the assessment of country risk when making financial decisions 11. Explain how corporate and country characteristics influence an MNCs cost of capital 12. Explain why there are differences in the costs of capital among countries 3 Place in the Curriculum and Related Courses The course International Finance and Accounting is an integral part of the Intopia Project. It will help in the playing of a computer simulation management game called Intopia. The couse is an important conclusion to the first year Financial and Managerial Accounting course, and an important conclusion to the third year Corporate Finance course as well. This course will help the student in his/her decision-making abilities, and help in his/her data providing capabilities for year 4 projects or work placements. It is also an important conclusion to the first year Business Economics course. The case studies help you to utilise all knowledge you have acquired in that course in the real world situations. 4 Study Burden Give yourself time to understand the concepts. Remember, finance reads differently than marketing. Make time for the difference! Make sure you practice the calculations weekly. Create a study group of two or more. You will find that extremely helpful. Class Contact Hours Readings (5 hours per week) Problem Solving (2.5 hours per week) Individual Assignments Exam Preparation: Total 28 hours 35 hours 18 hours 19 hours 30 hours 140 hours This means, on average, 20 hours study per week (7 weeks) for each student. 3/6

4 5 Pre-requisites A basic understanding of financial accounting, bookkeeping, and financial management issues are helpful for a successful completion of the course. Knowledge of Corporate management techniques will be helpful, but not a prerequisite In addition, please, keep informed on the world around you. Business people read and know what is happening. A few good sources for keeping abreast of current financial events are the Wall Street Journal available for free in our library, the Financial Times, or the Economist, listening to financial reports on CNN, BBC, Europe News or Al Jazeera (English) or watching Bloomberg or Reuters on the internet. All these will definitely help in making the concepts of the course become more understandable 6 Exemption Possibilities Exemption possibilities for this course are based on the school s policies on exemptions. 7 Competencies This course contributes to the development of the following competencies: I.1 International Business Awareness (level 1 and 2) - The ability to research, describe and understand the key patterns and trends in international business and to identify the role and importance of MNEs. - The ability to examine the impact of governmental policies and practices on international trade. - The student shows interest in international developments. I.1 International Business Awareness (level 2) - The ability to evaluate patterns and trends in international business, elaborate further on the theory and practice of international trade and financial markets. - The ability to explain various methods to enter foreign markets, outline the arguments to support one or another method of entering foreign markets. - The student can research and assess political risks and economic variables on foreign markets - The student is aware of recent international developments in specific regions I.1 International Business Awareness (level 3) - You will be able to do an extensive research and to make a transparent synopsis of an international study. On this basis you can advise management on the opportunities and threats in the international business environment. - You will be able to show a clear interest in international developments beyond the immediate scope of your own activities and read specialist literature on this topic. - You will be able to attune your own activities and those of the company to international trends. III.8 International Finance and Accounting (level 3) - The ability to describe and understand the consequences of the various risks inherent to international business. - The ability to contribute to management control of a multinational organisation by means of an integrated application of your knowledge of business accounting, management accounting, financial management, and other relevant aspects. 4/6

5 8 Didactic Forms This course will utilise lectures, class participation, class outings, video clips, and calculation tutorials. You will be expected to come to class prepared and ready to participate. It is a required portion of your assessment. There will be non obligatory assigned problems to help practice concepts covered in the text. Weekly activities, answers to the problems at the end of each chapter and the slides for each chapter can be found via SharePoint: the same webpage you find this course guide. 9 Assessment - Testing will be done through individual assignments and a two hour written exam at the end of the period. - The assignment (an electronic and a hard copy both of which must be identical) must be handed in on time. - The Assignments that are handed in late will not be graded. - There is no other possibility (occasion) to do the assignments rather than what is mentioned in this course guide. - Assignments DO NOT carry through from one year to the next. - There are two separate assignments: one for the final, and a second one for the resit for those students who do not get minimum 5.5 for their report. The deadlines for the assignments are in the table below. - You must take the final (or resit) exam in order to receive a final mark (together with the grade for the assignment) for the course. Examination grades cannot be carried on to the next year. - The grades of assignments and exams will always be announced together in one time, though at the time of publication of your grades, you will receive the details of your grades too. The deadlines for reports could be before or after the deadlines for exams, but you have to wait to do the exam and exam papers be corrected, and the assignments done and corrected, then you can get the grades of assignements and exams together. - The students must enroll for the course, the exams and the assignments (separately) on Osiris. - The students are not allowed to change their tutors (teachers), or classes without the permission of their teachers first. - The weights of the assignment and the final exam are as follows: Type of Assessment Weghing Min. Mark Individual assignment: report, on a financial topic 30% 5.5 Deadline for the final report: 09/10/2014 at 12:00 hours Deadline for the resit report: 04/12/2014 at 12:00 hours Final written Exam 70% 5.5 Final Grade 100% Students who cheat or plagiarize from others or from Internet sources will receive an automatic failing grade. 10 Course Material and Literature Title: International Financial Management BOOK ( Required ) Author(s): Jeff Madura and Roland Fox (West Publishing, St. Paul, Mnn.) ISBN: Edition: second Publisher: SOUTH-WESTERN CENGAGE Learning - Various outside readings to be handed out 5/6

6 11 Course Evaluation Evaluation by students will electronically be done at the end of the period 6/6