FIN-330 at Southern New Hampshire University extends the long-term investment and financing topics from the introductory finance course.
SNHU's catalog lists FIN 320 as the prerequisite and describes a focus on applied managerial decision making about capital budgeting and capital structure. The course is labeled writing intensive.
The catalog says it is designed for students who want a more thorough understanding of the economic analysis of strategic and tactical investments, the effect of financial leverage on firm value, and the integration of investment and financing strategy.
Course at a Glance
| Item | Details |
|---|---|
| University | Southern New Hampshire University (SNHU) |
| Course code | FIN-330 |
| Level and credits | Undergraduate, 3 credits |
| Prerequisite | FIN 320 |
| Subject area | Corporate finance |
| Format note | Writing intensive, per the catalog |
What FIN-330 Covers
| Topic from the catalog | In plain terms |
|---|---|
| Advanced capital budgeting | Evaluating large projects with more than one technique |
| Firm valuation | Estimating what a business is worth |
| Capital structure | The mix of debt and equity |
| Firm and division cost of capital | The return needed for the firm or a business unit |
| Quantitative risk assessment | Measuring uncertainty in project and firm results |
| Financial leverage | How borrowing affects value and risk |
Key Concepts Explained
Weighted Average Cost of Capital
The weighted average cost of capital (WACC) blends the cost of equity and the after-tax cost of debt by their shares of financing. It is commonly used as the discount rate for projects with average risk.
Example: A firm is 60% equity with a 10% cost of equity and 40% debt at 6% before tax, with a 25% tax rate. After-tax debt cost is 4.5%. WACC = 0.60 x 10% + 0.40 x 4.5% = 7.8%.
Leverage and Risk
Debt can raise returns for owners when business is good and magnify losses when it is not. Interest is a fixed obligation, so more debt raises the risk of financial distress.
Division Cost of Capital
A risky division should not use the firm-wide rate. Adjust the rate to the risk of the unit, then explain the adjustment.
Typical Assignments and How to Approach Them
| Assignment type | What it tests | How to approach it |
|---|---|---|
| Capital budgeting problems | Technique accuracy | Show cash flows by year and compare methods |
| Valuation exercise | Estimating firm value | State assumptions about growth and rates |
| Capital structure analysis | Leverage trade-offs | Compare value and risk at different debt levels |
| Case write-up | Writing and judgment | Recommendation first, then evidence and risks |
Writing a Finance Recommendation
Because the course is writing intensive, the numbers are only half the task. A strong written recommendation follows this order.
| Part | Content | Length guide |
|---|---|---|
| Recommendation | Accept, reject or choose option B | Two sentences |
| Key numbers | NPV, cost of capital, leverage effect | Small table |
| Reasoning | Why those numbers lead to the choice | One or two paragraphs |
| Risks | What could change the answer | Short list |
| Next step | What management should do | One sentence |
A Study Plan and Worked Example
| Topic | Practice | Check |
|---|---|---|
| Capital budgeting | Compare NPV, IRR and payback on one project | Explain any gap |
| Valuation | Value a firm with two growth assumptions | Show the effect of the change |
| Capital structure | Compare value at three debt levels | Mention distress risk |
| Cost of capital | Compute WACC, then adjust for a risky division | Justify the adjustment |
| Risk | Run best, base and worst cases | Say which case drives the decision |
Worked example (scenarios): A project's NPV is +$120,000 in the base case, +$400,000 in the best case and -$150,000 in the worst case. If you judge the worst case to be plausible and the firm cannot absorb the loss, the recommendation might be to pilot the project or negotiate protection against that risk. If the loss is affordable and the base case is solid, accept. State the reasoning either way.
Where Students Get Stuck
- Wrong discount rate. Match the rate to the risk of the cash flows.
- Using book values for weights. Check whether your instructor expects market values.
- Calculation without narrative. The course is writing intensive.
- Ignoring taxes. The debt tax shield matters for after-tax costs.
Study Tips for FIN-330
- Review FIN-320 time value and NPV before week one.
- Build a reusable spreadsheet with inputs separate from formulas.
- Run a sensitivity check on the discount rate.
- Draft the recommendation paragraph before finishing the calculations.
How We Help with FIN-330
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Frequently Asked Questions
FIN 320, per the SNHU catalog.
Yes, the catalog labels it writing intensive.
Evaluating long-term investments, such as new equipment or projects.
Yes, firm valuation is listed among the topics.
As a discount rate that reflects the blended cost of a firm's financing.
Yes, with explanation and feedback. You complete and submit your own work.