Corporate Financial Theory


Instructions to writer: These rules should be followed or paper wouldn’t be accepted/returned for revision.
Writer must know how to use the following programs: (Excel, Charts (power point))
1.    Paragraph Limitation:
•    Each paragraph must not exceed 6-7 lines.
i.    Note: Introduction can’t exceed 2 paragraphs as well.
•    Font: New roman
•    Size: 12
•    Spacing: Double Spaced
•    Referencing: Harvard Referencing
2.    Referencing:
•    Referencing must not be “in- progress”.
•    Max 12 Reference
3.    Plagiarism:
•    Must not exceed 6%
•    Information must not be Re-cycled from other online sources or (identical) previous work. “re-phrased”
4.    Table and Charts:
•    Must be provided for every Approach, Section B (1,2,3) and Section C
i.    Section B: Charts must be analyzed to further improve explanation.
ii.    Section C: Overall Chart (line/Better) that Indicates which approach is better and in what terms, Linking it to previous ones (Section B); Compare and contrast
5.    Sub-Heading:
•    Every Sections must be provided with a sub-heading to indicate what that essay will talk about;
i.    for example; In section B-B1; heading for:
1.    NPV
2.    Calculation giving a real Scenario example
3.    Choose the best within...
4.    Why is it the best
a.    (Compare & contrast)
6.    Construction of the essay:
•    Using these 3 approaches (NPV, Payback method, IRR) to determine the best method in 3 different scenarios.
•    Create a table (excel) Scenario: Must be 3 different scenario.
i.    Will be provided Picture: See attachment
1.    Note: Choose different numbers from that picture, due to be being a copy from someplace.
2.    Compare Section B: 1,2,3
•    Section C: Compare and contrast critical analysis
Essay Assignment:
Explain the theoretical rationale for the NPV (Net Present Value) approach to investment appraisal and compare the strengths and weaknesses of the NPV approach to two other commonly used approaches.
3000 words
Extra guidelines:
1.    Within the introduction, introduce the different methods (all of them), then say that you will pick the 3 forms, NPV, IRR, payback method.

2.    “Example – calculation” & “Choose the best”?

a.    This is for the Scenarios, that you will ‘come-up with’. Provide 3 to 4 with different numbers. Rates, amount etc.
i.    Remember that these scenarios (3-4); should be implemented for all approaches
ii.    I would like to see a graph for each, since it has different ways to calculations, including a line or better graph for section C to show the comparison. With more gain, risk, or borrow etc.
3.    Referencing
a.    I would like you to use these ‘some’ of these references from these books,
4.    Critical
a.    I believe that critical writing should be in section C, hence that everything is basic descriptive.
i.    Also try linking them, would be better if it was let say…..
1.    “ Company X, adapting investment one … “
The essential text book for this course is:
Hillier, D. et al., Corporate Finance, European edition, 2013, McGraw-Hill Irwin (customized textbook).
There are some alternatives:
1.    Berk, J. and DeMarzo, P., Fundamentals of Corporate Finance, 3e, PEARSON, 2014.

2.    Ross, Stephen A., Randolph W. Westerfield, Jeffrey F. Jaffe, and Bradford D. Jordan, Modern Financial Management, McGraw-Hill, 2008.

3.    Arnold, G., Corporate Financial Management, PEARSON, 2012.

4.    Brealey, R. and Myers, S., Principles of Corporate Finance, McGraw-Hill, 2012.

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