University of Colorado Boulder
Project Valuation and the Capital Budgeting Process
University of Colorado Boulder

Project Valuation and the Capital Budgeting Process

This course is part of Finance for Technical Managers Specialization

Taught in English

Some content may not be translated

3,291 already enrolled

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Course

Gain insight into a topic and learn the fundamentals

5.0

(48 reviews)

Intermediate level

Recommended experience

17 hours (approximately)
Flexible schedule
Learn at your own pace
Progress towards a degree

What you'll learn

  • Determine the net present value (NPV), internal rate of return (IRR), and payback periods (PBP) of a series of cash flows using spreadsheet analysis

  • Apply NPV, IRR, and PBP criteria to evaluate an organization’s investment options

  • Understand depreciation of capital assets, income taxes, and the effects of inflation and foreign exchange on cash flow

  • Build a sophisticated financial model by incorporating realistic cash flows for a project

Details to know

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Assessments

17 quizzes

Course

Gain insight into a topic and learn the fundamentals

5.0

(48 reviews)

Intermediate level

Recommended experience

17 hours (approximately)
Flexible schedule
Learn at your own pace
Progress towards a degree

See how employees at top companies are mastering in-demand skills

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This course is part of the Finance for Technical Managers Specialization
When you enroll in this course, you'll also be enrolled in this Specialization.
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There are 5 modules in this course

Considers more complex cash flow scenarios involving multiple cash flows, perpetuities, and the impact of multiple compounding interest periods per year. Many practical problems are worked both analytically and with spreadsheets.

What's included

7 videos1 reading3 quizzes1 discussion prompt

Project valuation determines whether the financial benefits are greater than the required investment. There are three primary valuation metrics used in business: the net present value, the payback period, and the internal rate of return. This module explores how to determine these metrics both analytically and using spreadsheet analyses.

What's included

8 videos4 quizzes

Project valuation criteria such as the NPV and IRR determine whether a project’s financial benefits are greater than the required investment. Companies use these metrics to select projects for funding during the annual capital budgeting process. Technical managers also make investment decisions but are often constrained to select only one alternative from several good ones. This module covers several project selection techniques to ensure the best project is selected.

What's included

5 videos4 quizzes

Preparing a comprehensive cash flow analysis for any investment requires accounting for the depreciation of equipment and other assets and the taxes paid on the project’s profits. Inflation can also significantly impact future cash flows and therefore must be addressed as well. This module develops the concepts of depreciation, taxes, and inflation and shows how these are determined.

What's included

7 videos3 quizzes

A critical element of a project’s business case is the financial justification – it needs to make good business sense for the company. This module focuses on the three primary components of a project’s cash flow statement: operations, net working capital, and capital spending. The project’s financial valuation is then conducted on the total cash flows, resulting in the NPV, IRR, and Payback Period to assess whether the project is financially worthwhile.

What's included

6 videos2 readings3 quizzes

Instructor

Instructor ratings
4.9 (20 ratings)
Michael J. Readey, Ph.D.
University of Colorado Boulder
9 Courses16,178 learners

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