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Capital Budgeting Techniques

Capital Budgeting Techniques

This course will show you how a financial manager makes capital investment decisions using financial tools. It is especially the case that this course addresses the concept of capital budgeting and how to evaluate investment projects using the net present value calculations, internal rate of return criteria, profitability index, and the payback period method.

In particular, this unit will teach you how to determine which cash flows are relevant (should be considered) when making an investment decision. Say for instance, you have been asked to give your recommendation about buying or not buying a new building.

As the financial manager, it is your task to identify cash flows that, in some way or another, affect the value of the investment (in this case the building). Also, this course explains how to calculate “incremental” cash flows when evaluating a new project, which can also be considered as the difference in future cash flows under two scenarios: when a new investment project is being considered and when it is not

Completing this course should take you approximately 6 hours.

Upon successful completion of this course, you will be able to:

  • Summarize the rules in capital budgeting when using net present value calculations;
  • Use the incremental approach in finance to compare the net present value of a project with the net present value of another project
  • Calculate the depreciation expense of an asset and demonstrate how that expense factors into the income statement and cash flow statement; and
  • Calculate the net present value of an investment option

Course Curriculum

SECTION 1: UNDERSTANDING CAPITAL BUDGETING

1
Introduction to Capital Budgeting
Self Paced
2
Capital Budgeting Techniques / Methods
Self Paced
3
Importance of Capital Budgeting
Self Paced
4
Quiz
10 questions

SECTION 2: INTRODUCTION TO DISCOUNTED CASH FLOW (DCF)

1
Overview of Discounted Cash Flow
Self Paced
2
Disadvantages of Discounted Cash Flow (DCF)
Swlf Paced
3
Overview of Cost of Capital
Self Paced
4
The Cost of Capital and Tax Considerations
Self Paced
5
Lease or Buy Decision
Self Paced
6
Quiz
5 questions

SECTION 3: ROLE OF NET PRESENT VALUE (NPV) IN BUDGETING

1
Understanding Net Present Value (NPV)
Self Paced
2
How to Calculate Net Present Value (NPV)
Self Paced
3
Limitations of Using a Payback Period for Analysis
Self Paced
4
Importance of Capital Budgeting
Self Paced
5
Quiz
10 questions
6
Wrapping Up
Self Paced

Certification

Coursepedia Demo Certificate
Showcase your achievements with a Valuable Certificate. Your certificate is the official recognition for your Learning achievements on Coursepedia. This is optional, but highly recommended after course completion. Verified Certificates issued by Coursepedia can differentiate you against competitions and also establishes you as a continuous learner anyday, anytime. Employers are always looking for people who never want to stop learning.

SECTION 1: UNDERSTANDING CAPITAL BUDGETING

1
Introduction to Capital Budgeting
Self Paced
2
Capital Budgeting Techniques / Methods
Self Paced
3
Importance of Capital Budgeting
Self Paced
4
Quiz
10 questions

SECTION 2: INTRODUCTION TO DISCOUNTED CASH FLOW (DCF)

1
Overview of Discounted Cash Flow
Self Paced
2
Disadvantages of Discounted Cash Flow (DCF)
Swlf Paced
3
Overview of Cost of Capital
Self Paced
4
The Cost of Capital and Tax Considerations
Self Paced
5
Lease or Buy Decision
Self Paced
6
Quiz
5 questions

SECTION 3: ROLE OF NET PRESENT VALUE (NPV) IN BUDGETING

1
Understanding Net Present Value (NPV)
Self Paced
2
How to Calculate Net Present Value (NPV)
Self Paced
3
Limitations of Using a Payback Period for Analysis
Self Paced
4
Importance of Capital Budgeting
Self Paced
5
Quiz
10 questions
6
Wrapping Up
Self Paced
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