BUS4070 is a specialization course at Capella University that opens the finance sequence in the BS in Finance and also appears in the BS in Accounting.
Capella says students analyze principles of financial decision making and how global economic conditions affect financial theory and decision-making processes. Students also evaluate and apply finance principles using financial tools.
Capella lists BUS3060, BUS2062 or BUS3062 as prerequisites, and BUS4070 is the prerequisite for BUS4071 and BUS4072. Students find it challenging because it blends calculation with judgment about rates, risk and the economy.
Course at a Glance
| Item | Details |
|---|---|
| University | Capella University |
| Course code | BUS4070 (GuidedPath) |
| Credits | 6 quarter credits |
| Level | Undergraduate, finance specialization course |
| Prerequisite | BUS3060, BUS2062 or BUS3062 |
| Leads to | BUS4071 and BUS4072 |
What BUS4070 Covers
| Area | What it involves |
|---|---|
| Financial decision making | The goal of the firm, investment, financing and working capital decisions |
| Time value of money | Present and future value, annuities and loan calculations |
| Risk and return | Expected return, diversification and the required rate of return |
| Capital budgeting | NPV, IRR and payback for investment decisions |
| Global economic conditions | Interest rates, inflation, exchange rates and their effect on decisions |
Financial decision making usually falls into three groups: investment decisions (which assets or projects to fund), financing decisions (how to raise the money) and working capital decisions (managing day-to-day cash, inventory and receivables). Framing a case around these three questions keeps an analysis organized.
Key Concepts Explained
Net Present Value
NPV discounts a project's future cash flows at the required rate of return and subtracts the initial cost. A positive NPV suggests the project adds value at that rate.
Example: A $20,000 project returns $8,000 a year for three years. At 10%, PV = 8,000 / 1.10 + 8,000 / 1.21 + 8,000 / 1.331 = 7,272.73 + 6,611.57 + 6,010.52 = $19,894.82. NPV = 19,894.82 - 20,000 = about -$105, so at 10% the project falls just short. At 9%, NPV turns positive, which shows how sensitive decisions are to the rate.
Risk, Return and the CAPM
Investors expect higher returns for higher risk. The capital asset pricing model estimates required return as risk-free rate + beta x (market return - risk-free rate).
Example: With a risk-free rate of 4%, an expected market return of 10% and a beta of 1.2, required return = 4% + 1.2 x 6% = 11.2%.
Global Conditions
Rising interest rates raise the cost of capital and lower present values; inflation erodes future cash flows; exchange rates change the value of foreign earnings. Capella's description makes these links part of the course.
Typical Assignments and How to Approach Them
| Assignment type | What it tests | How to approach it |
|---|---|---|
| TVM and valuation problems | Using financial tools | Show inputs, formulas or functions and units clearly |
| Capital budgeting analysis | Evaluating investments | Compute NPV and IRR, then test sensitivity to key assumptions |
| Economic conditions paper | Linking the economy to finance | Use current data on rates or inflation and explain the effects |
| Weekly discussion | Applying principles to news | Connect a current economic event to a financial decision |
Keeping Pace Through the Quarter
Finance concepts stack: valuation depends on time value of money, and capital budgeting depends on both. In a GuidedPath quarter, master TVM early, because nearly every later topic in BUS4070, BUS4071 and BUS4072 uses it.
Use the weekly discussions to follow live economic news, such as central bank rate decisions, and practice explaining how each development would change a company's financing or investment choices.
Cost of Capital
The discount rate used in NPV is often the weighted average cost of capital (WACC): the after-tax cost of debt and the cost of equity, weighted by their share of financing.
Example: A firm is financed 40% by debt at 6% and 60% by equity at 11.2% (from the CAPM example above), with a 25% tax rate. WACC = 0.40 x 6% x (1 - 0.25) + 0.60 x 11.2% = 1.8% + 6.72% = 8.52%. Projects of average risk would be evaluated at about this rate.
Linking WACC to your NPV analysis shows how the course's tools fit together.
Where Students Get Stuck
- Rate and period mismatches. Monthly payments need monthly rates and periods.
- Sign conventions in Excel. Cash outflows and inflows need opposite signs in TVM functions.
- NPV without sensitivity. Show what happens if the rate or cash flows change.
- Ignoring the economy. Link calculations to current conditions where the brief asks.
Study Tips for BUS4070
- Learn PV, FV, PMT, NPV and IRR functions and check them by hand.
- Keep a formula sheet with a worked example for each formula.
- Follow central bank and inflation news through the quarter.
- Keep notes; BUS4071 and BUS4072 build on this course.
How We Help with BUS4070
Send the problem, data, scoring guide and feedback. A finance writer can prepare a worked model, explain each calculation, or review your spreadsheet and written analysis. See our finance assignment help guide for more.
GradeEssays is independent of Capella University and does not give investment advice. Our work is a study aid; submit your own work under Capella's academic honesty policy. Free revisions; full refund if late.
Build a Solid BUS4070 Foundation
Share the assignment, spreadsheet and feedback. A finance writer prepares a custom worked analysis you can study.
Start My BUS4070 HelpFree revisions · Full refund if late · Written from scratch for your order
Frequently Asked Questions
Capella lists BUS3060, BUS2062 or BUS3062.
BUS4071 Financial Markets and Institutions and BUS4072 Analysis for Financial Management.
Same description; BUS4070 is GuidedPath with weekly pacing, BUS-FPX4070 is self-paced FlexPath.
Capella lists it in the BS in Finance and the BS in Accounting course lists.
The present value of future cash flows minus the initial investment, at the required rate of return.
Yes. A tutor can explain PV, FV, PMT, NPV and IRR and check your formulas.