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Applying Investment Decision Rules for Startups

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Applying Investment Decision Rules for Startups

This course is part of Valuation and Financial Analysis For Startups Specialization

Instructor: Saeyeul Park

8,011 already enrolled

Included with

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4 modules

Gain insight into a topic and learn the fundamentals.

87 reviews

Beginner level

No prior experience required

1 week to complete

at 10 hours a week

Flexible schedule

Learn at your own pace

4 modules

Gain insight into a topic and learn the fundamentals.

87 reviews

Beginner level

No prior experience required

1 week to complete

at 10 hours a week

Flexible schedule

Learn at your own pace

Skills you'll gain

Tools you'll learn

Microsoft Excel

Details to know

Shareable certificate

Add to your LinkedIn profile

Assessments

9 assignments

Taught in English

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This course is part of the Valuation and Financial Analysis For Startups Specialization

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There are 4 modules in this course

In the previous course, you learned financial statement analysis and how to make estimate of future financial status. In this course, you are going to learn capital budgeting. That is, how to make an investment decision. You would like to select the best project among various projects you can take. Then, you need to know the criteria. In this course, you are going to learn investment decision criteria such as NPV and IRR, which are most popular decision rules. Using financial analysis and discounted cash flow method, you can make pro forma financial statement and estimate project cash flows. Then, you apply investment criteria to determine whether to invest or not. After learning how to apply NPV and IRR method to investment decision, you are going to learn how to evaluate NPV estimate and scenario, what-if analyses and break-even analysis. In addition to NPV and IRR, you are going to learn Payback period method and Profitability method to determine whether to invest or not when there is a political risk or capital rationing.

Module details

Capital budgeting is the process of deciding whether to undertake an investment project. In this module, you will study the three most popular capital budgeting techniques in practice: Net present value (NPV), Payback period, and Internal rate of return (IRR).

What's included

5 videos4 readings2 assignments1 discussion prompt

5 videosTotal 29 minutes

Welcome to This Course1 minute
1.1 Introduction to Capital Budgeting4 minutes
1.2 Net Present Value (NPV)7 minutes
1.3 Payback Period9 minutes
1.4 Internal Rate of Return8 minutes

4 readingsTotal 40 minutes

1.1 Slide10 minutes
1.2 Slide10 minutes
1.3 Slide10 minutes
1.4 Slide10 minutes

2 assignmentsTotal 60 minutes

Week 1 Quiz30 minutes
Practice Quiz (1.1~1.4)30 minutes

1 discussion promptTotal 20 minutes

IRR assumption & NPV assumption20 minutes

In this module, you will learn how to estimate project cash flows using Excel. Overall, project cash flow analysis is similar to firm-level cash flow analysis. However, there also exist some unique features of a project cash flow analysis, which requires us to study the project cash flow principles.

What's included

4 videos4 readings2 assignments

Sometimes you have to evaluate multiple projects at a time. In this module, you will learn how to choose the best project among multiple projects. We will also discuss various important issues in NPV and IRR techniques. Finally, we discuss the fundamental principle in choosing the discount rate.

What's included

4 videos4 readings2 assignments

4 videosTotal 30 minutes

3.1 Evaluating Multiple Projects6 minutes
3.2 Comparing NPV and IRR techniques I7 minutes
3.3 Comparing NPV and IRR techniques II11 minutes
3.4 Choosing the Discount Rate7 minutes

4 readingsTotal 40 minutes

3.1 Slide10 minutes
3.2 Slide10 minutes
3.3 Slide10 minutes
3.4 Slide10 minutes

2 assignmentsTotal 60 minutes

Week 3 Quiz30 minutes
Practice Quiz (3.1~3.4)30 minutes

We continue to study analyzing business projects, but the difference in this module is that now we consider the value of "real options" embedded in the project. You will learn how to estimate the project's value by using the decision tree approach or the Black-Scholes option pricing model.

What's included

4 videos4 readings3 assignments1 discussion prompt

4 videosTotal 32 minutes

4.1 Options Basics7 minutes
4.2 Decision Tree Approach8 minutes
4.3 Black-Scholes Option Pricing Model10 minutes
4.4 Evaluating Projects Using B-S Model7 minutes

4 readingsTotal 40 minutes

4.1 Slide10 minutes
4.2 Slide10 minutes
4.3 Slide10 minutes
4.4 Slide10 minutes

3 assignmentsTotal 150 minutes

Week 4 Quiz40 minutes
Final Quiz80 minutes
Practice Quiz (4.1~4.4)30 minutes

1 discussion promptTotal 20 minutes

Applying the B-S model to price a real option20 minutes

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Instructor

Instructor ratings

(11 ratings)

Saeyeul Park

Yonsei University

1 Course8,011 learners

Offered by

Yonsei University

Learner reviews

5 stars
74.71%
4 stars
16.09%
3 stars
5.74%
2 stars
0%
1 star
3.44%

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Reviewed on Aug 21, 2019

Course was a lot cleaner, as far as mistakes in the quizzes / tests than the previous three courses; accordingly, I was able to focus on the material and get done a lot faster. Good course.

Reviewed on Jul 22, 2017

All things are explained in a well manner..!! Helped a LOT..!

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