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Introduction to Finance, BA 531 (2 credits)

Short Description: Financial analysis and decision making with Microsoft Excel
MBA Curriculum: Core
Enrolled in MBA Program
Fall 2016, MBA Module 2
10/17/2016 - 12/06/2016 (Holiday 11/20/16 - 11/26/16)
Section 201: Tuesdays and Thursdays / 8:00AM 10:00AM
Section 202: Tuesdays and Thursdays / 10:30AM 12:30PM
Section 201: 126 Business Building
Section 202: 125 Business Building
Lou Gattis, Clinical Professor of Finance and MBA/EMBA Faculty
304 Business Building
Instructor Office Hours: Mondays and Wednesdays 2:30PM 4:00PM
Office Phone:
Course Website:
ANGEL (cms.psu.edu)
Instructor Website: https://sites.google.com/site/lougattis/
YouTube Channel: https://www.youtube.com/playlist?
Teaching Assistant
Nicole Clarke, MBA Class of 2017
Office Hours:
Mondays and Wednesdays 12:00PM 1:00PM
Learning Objectives
(1) Understand and apply the financial principles that aid decision making such as time
value of money, rate of return measures, risk measures, risk and return tradeoff,
valuation, hedging, and portfolio theory
(2) Become proficient in Microsoft Excel and build financial models that effectively
communicate financial analysis and decisions.
Prerequisite Knowledge and Skills
(1) Basic understanding of financial accounting and financial statements (Balance Sheet,
Income Statement, Cash Flow Statement)
(2) Basic Microsoft Excel skills necessary to open a worksheet, enter simple formulas using
row and column indexes (such as entering =A1+A2 into cell A3), insert simple
functions (such as SUM and AVERAGE), copy formulas to other cells by dragging,
change formats (such as currency, percent, decimal places), print worksheet sections,
and save files as Excel macro-enabled workbook (course default). We will learn some
VBA programming, but students are not expected to have any prior knowledge of
programming or VBA. Required Excel Addins are (1) Analysis ToolPack, (2) Analysis
ToolPack VBA, and (3) Solver. Add-ins can be added by selecting FILE, OPTIONS, ADD1

IN, GO, and then selecting the required add-ins. We will also use the developer tab by
TAB. These instructions are for MS Office 2013 - other Office versions may vary. Make
sure your laptop and MS Excel is ready before the first class.
Assessments (overall grade weights)
(1) Individual Quizzes: In-Class, Open Book, Open Computer, No Internet (30%)
(2) Group Assignments: Excel Worksheets, printed and returned in class (30%)
(3) Final Exam (30%)
(4) Case Analysis and Presentation (10%)
Course Material (Textbooks, Packets, Hardware, Software, Cases, Etc.)
(1) Required: Principles of Finance with Microsoft Excel 2nd Ed. with CD by Simon Benninga
ISBN 978-0-19-975547-9
(1) Required: Laptop computer for use in the classroom and for assignments. Each student
will need to bring a laptop every class to build models and work on in-class
(2) Required: Microsoft Excel 2007 (or later). I will be using MS Office 2013 (you can see
the version from Excel by selecting FILE and then selecting ACCOUNT)
Smeal Honor Code
We, the Smeal College of Business community, aspire to the highest ethical standards
and will hold each other accountable to them. We will not engage in any action that is
improper or that creates the appearance of impropriety in our academic lives, and we
intend to hold this standard in our future careers.

Examples of Course Specific Academic Integrity Violations

(1) Use of the internet, email, texts, phones, or any other social media during in-class
(2) Looking at another students work during an in-class quiz or exam
(3) Not contributing to each group assignment or allowing others to get credit without
(4) Access to prior semester solutions to assignments, quizzes, or final exam
(5) Use of internet sites that provide solutions to problems, cases, exams, etc.
(6) Sharing solutions across multiple groups
(7) Completing final exam with aid from another student, former student, or any other
outside resource other than the instructor or TA.
When in Doubt --- Ask me!
Other Course Specific Policies (Attendance, Technology, Makeup of Missed Work,
(1) Attendance is not mandatory, but it is expected
(2) Students are asked to refrain from using computers or phones for non-course uses
during class because these are distracting to other students

(3) Students are expected to bring a laptop to class every day. If your laptop is unavailable,
please make arrangements to share with another student.
(4) Students are asked to read sources such as the WSJ, NY Times, Economist, and
finance.yahoo.com and find articles that relate to course material. We will cover this at
the end of lectures if time permits.
Assignment Submission Guidelines
(1) Assignments are to be handed in at the beginning of the class in which they are due
(2) Assignments are printed in color of black, stapled, and includes a cover page
(3) Cover page format
Includes team names in alphabetic order by last name, assignment #, due
date, and course name.
Honor code pledge and signatures
We affirm that we have neither given, received, nor witnessed unauthorized
aid on this deliverable and have completed the work honestly and according
to the professor's guidelines.
Summarize all results (or provides links to results from other worksheets). For

(4) Excel Worksheet format

Shows all work (input cells, calculation cells, final results)
Problems are numbered and the answers to each problem is highlighted to
stand out
Clarity and Style: Your grade may be lowered if the worksheet does not
effectively communicate the analysis. Be sure to use Excel styles (input,
calculation, output, etc.), data and graph labels, correct grammar,
appropriate spacing and print ranges, comments where needed to help
reader understand logic, appropriate decimal places (e.g., dont show cents if
answers > $10,000, show 2 decimal places for percentages), appropriate cell
borders, correct formats ($, %, foreign currency, etc.), hidden cells if it allows
reader to better follow analysis, appropriate font size (including shrinkage
from printing), page breaks (use insert page break and page break preview),
and narrow margins to save paper.

Preliminary Schedule (Topics, Exam Dates, Quiz Dates, Assignment Dates):

Tuesday, October 18,
Thursday, October 20,
Tuesday, October 25,
Thursday, October 27,
Tuesday, November 1,
Thursday, November 3,
Tuesday, November 8,
Thursday, November 10,
Tuesday, November 15,
Thursday, November 17,
Tuesday, November 22,
Thursday, November 24,
Tuesday, November 29,
Thursday, December 1,
Tuesday, December 6,
Thursday 12/8

1. Analysis and Forecasting of Financial
Quiz #1 (See Assignment Problem #1)
2. Computing Cost of Debt, Cost of Equity, and
Team Assignments 1-2 Due (Review in Class)
3. Valuing Equity and Enterprise Value (Function)
Quiz #2 Topics 1-2
4. Capital Budgeting - NPV (TVM) and IRR
Team Assignments 3-4 Due (Review in Class)
5. Capital Budgeting - NPV using WACC and FCFF
Quiz #3 Topics 3-4
6. Capital Budgeting - Releveraging, EAC, Issues
Team Assignments 5-6 Due (Review in Class)
7. Performing Sensitivity Analysis
Quiz #4 Topics 5-6
8. Hedging Cashflows with Forward and Option
Team Assignments 7-8 Due (Review in Class)
9. FX Rates and Global Finance
Quiz #5 Topics 7-8
10. Bonds and Duration Risk Management
Team Assignments Due 9-10 (Review in Class)
11. Computing Portfolio Risk and Return
Wed. 11/30 1-5PM: Team Case Presentations
Thur. 12/1 8-1: Team Case Presentations
Team Assignment 11 Due (Review in Class)
12. Analyzing Personal Financial Problems
9AM-12 Final Exam
Rooms 126/125

Standard Content Required In All Syllabi:

According to the Penn State Principles and University Code of Conduct:
Academic integrity is a basic guiding principle for all academic activity at Penn State
University, allowing the pursuit of scholarly activity in an open, honest, and responsible
manner. According to the Universitys Code of Conduct, you must neither engage in nor
tolerate academic dishonesty. This includes, but is not limited to cheating, plagiarism,
fabrication of information or citations, facilitating acts of academic dishonesty by others,
unauthorized possession of examinations, submitting work of another person, or work
previously used in another course without informing the instructor, or tampering with the
academic work of other students.

Any violation of academic integrity will be investigated and, where warranted,

corrective academic and/or disciplinary action will be taken. For every incident where a
penalty is assessed, an Academic Integrity Incident Report form must be filed. The
form can be found on the Smeal College Honor and Integrity website:
http://ugstudents.smeal.psu.edu/honor. This form is to be used for undergraduate
courses. The report must be signed and dated by both the instructor and the student,
and then submitted to Jeff Sharp, Associate Dean for Undergraduate Education, 202
Business Building.

University Policy G-9

Once a student has been informed that academic misconduct is suspected, the
student may not drop the course during the adjudication process. The Dean of the
College (UP) and/or the Chancellor (campuses) or his or her representative is
responsible for notifying the Office of the University Registrar when academic
misconduct is suspected in a course. Any drop or withdrawal from the course during
this time will be reversed. A student who has received an academic sanction as a result
of a violation of academic integrity may not drop or withdraw from the course at any
time. These drop actions include regular drop, late drop, withdrawal, retroactive late
drop and retroactive withdrawal. Any such drop action of the course will be reversed.
This drop policy may be superseded in exceptional circumstances (i.e. trauma drop). In
these cases, the Office of Student Conduct or the Student Conduct designee will confer
with the Dean of the College (UP) or the Chancellor (campuses) or his or her
representative to determine if the drop is warranted.
University Policy G-9


Smeal Honor Code:

We, the Smeal College of Business Community, aspire to the highest ethical
standards and will hold each other accountable to them. We will not engage in any
action that is improper or that creates the appearance of impropriety in our
academic lives, and we intend to hold to this standard in our future careers.

All work you submit for grading or academic credit is designed to reflect your knowledge
and skill related to the course subject matter. Therefore, unless otherwise indicated, all
work submitted is to be done on an individual basis. This includes but is not limited to all
exams, quizzes, homework, papers, written assignments, and presentations.

Plagiarism is claiming work as your own that you have copied from another person,
whether that other person knows about it or not. This includes copying from web sites
without proper source citation and using homework or papers prepared by current or past
students whether working as an individual or working in a group / team.


The Pennsylvania State University is committed to a policy where all persons shall have
equal access to programs, facilities, admission, and employment without regard to
personal characteristics not related to ability, performance, or qualifications as determined
by University policy or by Commonwealth or Federal authorities. Penn State does not
discriminate against any person because of age, ancestry, color, disability or handicap,
national origin, race, religious creed, gender, sexual orientation, or veteran status.
Related inquiries should be directed to the Affirmative Action Office, 328 Boucke Building.
Students with Disabilities
Penn State and the Smeal College of Business welcome students with disabilities to all of
its classes, programs and events. The Penn State Office of Disability Services (ODS) in
Room 116 Boucke Building provides a vast array of services for students with disabilities
according to mandates under Title II of the ADA amendments Act of 2008 and Section 504
of the Rehabilitation Act of 1973. For more information or to meet with a service provider
from ODS, contact them at (814) 863-1807 (V/TTY) or visit their website at:
In order to receive consideration for reasonable accommodations, students must contact
the ODS, participate in an intake interview, and provide documentation:
http://equity.psu.edu/ods/guidelines. If the documentation supports the request for
reasonable accommodations, ODS will provide an accommodation letter to share with the
instructor as early in the course as possible. Adjustments will be made based on the
recommendations in the accommodation letter. This process must be followed each
semester that accommodations are requested.