Principles of Finance (FIN 311)


FIN 311-01

Fall 2016



Instructor:  Donald W. Swanton

Contact Information:  office Wabash 1112z, telephone (312) 281-3278, fax (312) 281-3290, email  To find my web page Google “Swanton Roosevelt”.  I am the first hit.  My web site has information about office hours etc.

Time:  Tuesday-Thursday 11:00-12:15                                                        Location:  WB 911

Office hours in WB1112Z:

Mondays         1:00-2:00 and 5:00-6:00

Tues-Thurs     10:30-11:00 and 1:00-2:00


Text:  Foundations of Financial Management  16th ed/2017 by Block, Hirt, and Danielson, (B), McGraw-Hill ISBN-9781259277160.  Students should have financial calculator (TI BA-II or II+ or TI 83+, TI84, or TI89).  If you bought a graphing calculator for MATH 116 or 121, you have the right one. I will be handing out my Notes on Finance (S) in class as the semester progresses.

Prerequisites:  ACCT 210 (but NOT 211), ECON 101-102, MATH 116 or 121, ENG 101-102 all with a min grade of C-.  The mathematics prerequisite is very important.  Students who attempt this class before finishing it generally drop the class within a few weeks.

Goals:  This course introduces students to the time value of money.  We will develop some of its applications to corporate investment planning, valuation of projects and securities, and to retirement planning.   Then we will discuss capital structure (the difference made by the firm’s choice of financing) from both economic and ethical points of view

Grades:  Grades will be determined by an equally weighted average of the best three out of the four quiz grades and the retirement planning project.  Quizzes will receive the numerical version of letter grades, A = 4.00, A/B = 3.50, B = 3.00 B/C = 2.50, etc.  To receive an A for the course you need an average of at least 3.51, to receive a B at least 2.51, etc.

Credit:  3 sh

Teaching Method:  I will first lecture about each new piece of material, then I will assign homework problems, and then we will go over the problems in class.  At that point each piece of material becomes eligible to appear on the next quiz.

Homework:  I will assign problems each Thursday due the following Tuesday when we will discuss them.  This discussion will include additional parts of some the problems not assigned at first and new problems suggested by student questions.  Do not think that because we will go over the answers on Tuesday that you can afford not to try them first.  Finance is not a spectator sport.  These problems are the heart of the course.  They often reappear on subsequent quizzes.  I will collect homework and check it in but not grade it.

Attendance:  I do not usually take attendance after the first week, however I may take attendance on a few Tuesdays.  See the section on homework.

Plagiarism:  Please review Roosevelt’s policy on plagiarism

Religious Holidays:  Roosevelt’s policy is to accommodate students who will be celebrating religious holidays, and my policy is to be flexible.  Rosh Hashanah will be Monday and Tuesday Oct. 2 and 3 this year, followed by Yom Kippur Wed. Oct. 12.  Eid al Adha is Tuesday  Sep. 13.  Talk to me in the first couple of weeks, and we will work something out.

Student Learning Objectives:  Business Discipline Principles, Quantitative Techniques, Business Ethics

Notes:  My Notes on Finance currently consist of:

S1    Retirement Planning

S2   Leverage and Breakeven Analysis

S3    Capital Structure and Leverage

S4    Corporate Governance and Ethics

The following schedule is tentative.  I will revise it as we go along to reflect what we have covered and how much time remains in the semester, and I will put these revisions on my web page.


                                                                As of November 8, 2016

Week                Chapters                     Topics

Aug 30             B9                                Introduction, the time value of money

Sep 6                B9                                More time value of money

Sep 13               B10                             Bond valuation


Sep 20              S1                                 Review, retirement planning

Sep 27*            S1                                 Retirement planning

Oct 4                B12                              Capital budgeting, the process

Oct 11               B12                              Net Present Value and Internal Rate of Return

Making up for time lost by my surgery.

Oct 18              B12                              Retirement planning and capital budeting

Oct 25*            B12, B13                     NPV and IRR

Nov 1               B12, B13                     More, mutually exclusive projects

October 31 is the last date to withdraw from the class and received a W grade.

Nov 8               S2, S3                        Cash flows for capital budgeting

Nov 15*            S2, S3                       Leverage and capital structure

Nov 22           ////                             Thanksgiving break

Nov 29             S3                               The world of Perfect Markets, arbitrage

Dec 6               S3, S4                         Investment and governance, economics and ethics

                                                          Projects due Thursday Dec. 8

Dec 13*           /////                           Last Quiz Tuesday Dec. 13

Quizzes will be given on the Thursdays of weeks marked with an asterisk (*) except for the last quiz in final exam week which will be on Tuesday.






Standard Version

You are a financial planner.  You have clients who are just beginning to think about planning for retirement.  They are both thirty five years old and have $85,000 in a company retirement plan which they can roll over into their own plan.  They want to retire at 67 but are wondering what effect retiring a year or two earlier or later will have on their retirement.  Their combined income is $120,000 per year, and they want to finance the same income in retirement.  When they retire they can purchase a two-life annuity with an expected second death at age 87.

They have not taken any finance courses, and their last mathematics course was many years ago.  They will not understand equations, formulas, or finance jargon.  The words we have been using in FIN 311 are all strange to them.  Large tables will make their eyes glaze over.  You must explain your recommendations to them in simple, ordinary language.  Prepare a plan with some alternative rates of return and retirement dates and explain what annual contributions they must make to the plan to make their retirement what they want.  Make your own assumptions about social security by the time they retire.

Half your grade will be determined by the calculations you choose to make, and half will depend on the clear and simple presentation of your recommendations.


Alternate Version

You may use yourself or someone you know as the client rather than the couple in the first version.  This client does not know any more about finance or mathematics than the couple, so you must explain everything in the same simple language.



Roosevelt University Policies

The university’s three overall learning goals for both undergraduate and graduate students are:

  • Goal:  Effective communication.
  • Goal:  Knowledge of disciplined-focused content.
  • Goal: Awareness of social justice and engagement in civic life.


*** Academic dishonesty: The university’s policies on issues such as plagiarism, recycling, cheating and other forms of academic dishonesty can be found in the student handbook, which is available as a link here: .  Additional guidelines for avoiding plagiarism are available here:

*** Disability:  Roosevelt University complies fully with the Americans with Disabilities Act. Details about ADA and Roosevelt’s policies and practices are found in the following link:   If you have a condition or disability that requires reasonable accommodation, please alert your instructor or the Academic Success Center as soon as possible, certainly before any assignment or classroom activity that requires accommodation.  The Academic Success Center is located in AUD 128 in Chicago, and the phone number is 312-341-3818. In Schaumburg, the office is in room 125, and the phone number is 847-619-7978. Email Nancy Litke at or Danielle Smith at .

*** Withdrawal date: The final date for an official withdrawal from this class (meaning a “W” would appear on your transcript) is Monday, Oct. 31. After that, if you want to withdraw, you’ll need to petition the registrar. Petitions are granted only for non-academic reasons after the deadline. If you receive financial aid, it’s best to check with your counselor to assure that aid isn’t affected by withdrawing from a class. The complete withdrawal policy is here:

*** Religious holidays: Please let your instructor know as soon as possible if you will miss class because you are observing a religious holiday. Roosevelt University policy requires written notification to me within the first two weeks of the term. Any work you miss because of a religious holiday can be made up. You can see the full policy here:

*** Student Code of Conduct: Students enrolled in the university are expected to conduct themselves in a manner compatible with the university’s function as an educational institution.

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