APPLIES TO ACADEMIC YEAR 2012/2013
BST 9502 Advanced Managerial Accounting and Real Investment Theory|
Responsible for the course
Department of Accounting - Auditing and Law
According to study plan
Language of instruction
ThiIn combination with BTH 9503 Bachelor’s Thesis – Business Economics, 15 credits this course will constitute a specialization of 30 credits, and be named as a specialization on the certificate. Other students can choose the course as an elective course in their 3rd year of study.
The specialisation is analytically oriented and develops the participants’ skills to take decisions according to the partner’s interest. The purpose of the interplay between economic theory, economic models and data from the market and the accounting system, is to ensure that the students gets the necessary knowledge to be strong- minded persons regarding problems of business management. The specialisation is practically oriented, and the intention is to make sure that the student is familiar with the most common economic problems, from both the private sector and public sector. The specialisation intends to give the participants a background that will enable them, after acquiring the necessary knowledge of the relevant trade, to become business partners
After taking the course, the students should be able to explain key concepts and give an account of the tools of analyses of business economic problems (these tools include methods, techniques, theories, etc. applied in the subject area).
After taking the course, the students shall:
After taking the course, the students shall
The students are supposed to have previous knowledge in mathematic, investment and finance theory, statistic and accounting corresponding to two year of study in business and administration at the university level.
Blocher, Edward J., David E. Stout, Gary Cokins. 2010. Cost management : a strategic emphasis. 5th ed. McGraw-Hill/Irwin
Copeland, Tom and Vladimir Antikarov. 2003. Real options : a practitioner's guide. New ed. Texere
I tillegg vil materiale utdelt under forelesningene være å anse som pensum.
Boquist, John A., Todd T. Milbourn and Ajnan V. Thakor. 2010. The value sphere : the corporate executives' handbook for creating and retaining shareholder wealth. 4th ed. World Scientific Publishing
Kaplan, Robert S. and Robin Cooper. 1998. Cost & effect : using integrated cost systems to drive profitability and performance. Harvard Business School Press
Business Economic consist of four topics:
Topic 1: Strategisk cost analysis
Strategic cost analysis deal with different aspects of cost management, such as problems regarding the best way to distribute resources, deciding the best extent of resources and how to motivate the employees to work with resource management. An important objective is to make students to understand that “number is alive”, that every number has to be tailored depending of what kind of decision is going to be taken. The amount of such numbers, decision relevant numbers, depends on the aims of the decision. Relevant theory and methods, making students able to calculate or estimate decision relevant costs, whether the decision is a matter of products, customers, efficiency or outsourcing, will be emphasised.
Topic 2: Incentive contracts modelling
The students shall understand a simple principal –agent model, the advantages and disadvantages, and be able to analyse and develop incentive contracts in practice. The students shall know the essential results from international studies.
Introduction to Incentive contracts modelling:
Topic 3: Linear programming
The students shall understand the need for Linear Programming (LP), for instance in connection with staff allocations, capital rationalisation, production planning and deciding the product mix. They shall also be able to formulate different business problems, use the solver function in Excel, interpret data and reflect on the Excel solution, and finally, outline improving amendments.
Introduction to LP:
Topic 4: Multi period firm valuation and project valuation
Multi period valuation is about economic evaluation of real investments alternatives or about economic evaluation of firms, or parts of firms. Regarding to the evaluation of real investments alternatives, the value of flexibility will be emphasised, and thus the students will be able to use the net present value method in an advanced way. The insight of flexibility will help the students to understand that flexibility, the possibility to make corrective decisions, must be taken into account before the decision has been made. This is true whether the result in the future, as a consequence of the decision, proves to be better or worse than expected. Practical use of option theory, and how qualitative factors can be taken into consideration, will be lectured. The students will learn about different firm valuation methods, and in relation with this, the need for accounting corrections.
Introduction to Multi period firm valuation project valuation:
Spread sheet (Excel).
Learning process and workload
The specialisation Business Economics has 90 hours of lectures in the autumn term, including 10 hours of assignment reviews.
Recommended use of hours:
A 5 hour individual written exam concludes the course.
BST 95021 Written examination, counts 100% towards the final grade in BST 9502 Business Economics, 15 credits
Examination support materials
Books, notes from the lectures, BI defined calculator, TEXAS INSTRUMENTS BA II Plus™, is allowed.
Examination support materials at written examinations are specified under exam information in our web-based Student Handbook. Please note use of calculator and dictionary.
A re-sit examination is offered the next time course is taught.
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