Decision-Making and Scenarios

4.6
669 ratings
93 reviews

Course 4 of 5 in the Business and Financial Modeling Specialization

This course is designed to show you how use quantitative models to transform data into better business decisions. You’ll learn both how to use models to facilitate decision-making and also how to structure decision-making for optimum results. Two of Wharton’s most acclaimed professors will show you the step-by-step processes of modeling common business and financial scenarios, so you can significantly improve your ability to structure complex problems and derive useful insights about alternatives. Once you’ve created models of existing realities, possible risks, and alternative scenarios, you can determine the best solution for your business or enterprise, using the decision-making tools and techniques you’ve learned in this course.
Globe

100% online course

Start instantly and learn at your own schedule.
Clock

Approx. 7 hours to complete

Suggested: 4 weeks of study, 1-3 hours/week
CommentDots

English

Subtitles: English

Skills you will gain

Financial StatementBalance SheetDecision-MakingFinancial Modeling
Globe

100% online course

Start instantly and learn at your own schedule.
Clock

Approx. 7 hours to complete

Suggested: 4 weeks of study, 1-3 hours/week
CommentDots

English

Subtitles: English

Syllabus - What you will learn from this course

1

Section
Clock
2 hours to complete

Evaluation Criteria: Net Present Value

This module was designed to introduce you to the many potential criteria for selecting investment projects, and to explore the most effective of these criteria: Net Present Value (NPV). Through the use of concrete examples, you'll learn the key components of Net Present Value, including the time value of money and the cost of capital, the main utility of NPV, and why it is ultimately more accurate and useful for evaluating projects than other commonly used criteria. By the end of this module, you'll be able to explain why net present value analysis is the appropriate criteria for choosing whether to accept or reject a project, and why other criteria, such as IRR, payback, ROI, etc. may not lead to decisions which maximize value....
SvgReading
6 videos (Total 73 min), 2 readings, 1 quiz
Video6 videos
1.1 Introduction: Criteria for Evaluating Projects6m
1.2 Time Value of Money19m
1.3 NPV Analysis of Projects16m
1.4 Other Evaluation Techniques15m
1.5 The Cost of Capital10m
SvgReading2 readings
PDFs of Lecture Slides10m
Excel Spreadsheets: Module 110m
Quiz1 practice exercises
Evaluation Criteria: Module 1 Quiz20m

2

Section
Clock
2 hours to complete

Evaluating Projects

In this module, you'll learn how to evaluate a project with emphasis on analyzing the incremental after-tax cash flows associated with the project. You'll work through a concrete example using alternative scenarios to test the effectiveness of this method. You'll also learn why only future cash flows are relevant, why to ignore financial costs, include all incidental effects, remember working capital requirements, consider the effect of taxes, forget sunk costs, remember opportunity costs, use expected cash flows, and perform sensitivity analysis. By the end of this module, you'll be able to evaluate projects more thoroughly and effectively, with emphasis on how to model the change in the company’s after-tax cash flows, so that you can make more profitable decisions....
SvgReading
5 videos (Total 63 min), 1 reading, 1 quiz
Video5 videos
2.2 Analyzing Incremental After-Tax Flows - Operating Phase12m
2.3 Analyzing Incremental After-Tax Flows - Terminal Phase6m
2.4 Example: New Production Machine12m
2.5 Key Considerations in Evaluations19m
SvgReading1 readings
PDFs of Lecture Slides10m
Quiz1 practice exercises
How to Evaluate Projects: Module 2 Quiz22m

3

Section
Clock
1 hour to complete

Expressing Business Strategies in Financial Terms

This module was designed to give you the opportunity to learn how business activities, transactions and events are translated into financial statements, including balance sheets, income statements, and cash flow statements. You'll also learn how these three statements are linked to each other, and how balance sheets and income statements can help forecast the future cash flow statements. By the end of this module, you'll be able to explain how accounting systems translate business activities into financial terms, and how to use this to better forecast future cash flows, so that you can express your business strategies in these financial terms, and show "the bottom line" for your proposed plan of action....
SvgReading
3 videos (Total 52 min), 1 reading, 1 quiz
Video3 videos
3.2 Balance Sheets and Income Statements15m
3.3 Cash Flow Statements17m
SvgReading1 readings
PDFs of Lecture Slides10m
Quiz1 practice exercises
Financial Statements and Forecasting: Module 3 Quiz20m

4

Section
Clock
2 hours to complete

New Product Value

In this module, you'll apply what you’ve been learning to an analysis of a new product venture. You’ll learn how to map out a plan of the business activities, transactions and events that need to happen to implement the new venture, including their timing. You'll also learn how to set up a spreadsheet to help with forecasts, and to re-calculate things automatically as we re-think our plans. You'll see how to forecast out the implied financial statements, and calculate the Net Present Value (NPV). By the end of this module, you'll be able to use spreadsheets to explore different risks a venture may face, and analyze the implications of these scenarios for NPV, so that you can make the most profitable, data-driven decision possible....
SvgReading
6 videos (Total 51 min), 2 readings, 1 quiz
Video6 videos
4.2 Forecasting Future Cash Flows11m
4.3 NPV and IRR Calculations5m
4.4 Formulation and Evaluation of Alternative Scenarios15m
4.5 Expanding Beyond the Time Horizon9m
Course Conclusion0m
SvgReading2 readings
PDFs of Lecture Slides10m
Excel Spreadsheets: Module 410m
Quiz1 practice exercises
Calculating Value: Module 4 Quiz20m
4.6
SvgDirectionSigns

17%

started a new career
Briefcase

83%

got a tangible career benefit from this course
Money

20%

got a pay increase or promotion

Top Reviews

By SRApr 23rd 2017

The course material and examples are very useful. I really like the CF spreadsheet at the end of week 4 as this is very organized CF model and I can use this as reference to build my own. Thank you!

By VONov 5th 2016

Es un excelente curso. Lo recomiendo ampliamente para quienes tienen nociones básicas o intermedias de finanzas. Interesante la aproximación al tema que utilizan los profesores. Gracias.

Instructors

Avatar

Richard Lambert

Professor of Accounting

About University of Pennsylvania

The University of Pennsylvania (commonly referred to as Penn) is a private university, located in Philadelphia, Pennsylvania, United States. A member of the Ivy League, Penn is the fourth-oldest institution of higher education in the United States, and considers itself to be the first university in the United States with both undergraduate and graduate studies. ...

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