Assessment of company development projects 2600-MSFRdz2rrfOPRP
1. Foundation and Key Concepts of Project Investment Analysis
1.1 The nature and Types of Investments
1.2 Investments and Corporate Strategy: Aligning Investment Decisions with Overall Strategy
1.3 Corporate Finance, Project Finance and Public Private Partnerships Fundamentals
1.4 Sustainable Development Concept and its Significance for Budgeting and Evaluation of Development Projects
2. Capital budgeting – Financial Modeling of Investment Projects
2.1 Steps of Capital Budgeting Process
2.2 Inputs for an Investment Project’s Financial Model
2.3 The List of Capital Budgeting Bad Practices - Avoiding Bad Modeling Practices and Creating Effective Auditing Processes
3. Key issues in Appraising Projects
3.1 Classification of Cash Flow and Its Importance in the Investment Decision-Making
3.2 The Time Value of Money and Its Applications in Project Valuation
3.3 Equity and Debt as Long-Term Sources of Corporate Financing – Risk Analysis
3.4 Importance and Use of Weighted Average Cost of Capital (WACC) and Its Applications in Project Valuation
3.5 Modeling Cash Flow with Sustainable Development Principles in Mind
4. Application of Discounted and Traditional (Undiscounted) Methods for the Evaluation of Investment - Commercial vs. Social Cost-Benefit Analysis
4.1 Fixed Costs and their Importance for Investment Decision Making
4.2 The Application of Discounted and Traditional (Undiscounted) Methods for the Evaluation of Investment Projects
4.3 Reinvestment Assumption
4.4 Ranking Mutually Exclusive Projects
4.5 Project Finance Valuation Techniques - The Use of Free Cash Flow to Calculat ‘Cover Ratios’ including: Annual Debt Service Cover Ratio (‘ADSCR’), Loan-Life Cover Ratio (‘LLCR’), The averages of the ADSCR and LLCR over the term of the debt, The project-life Cover Ratio (‘PLCR’).
4.6 Applications of Real Options in Investment Appraisal
5. Identifying and Mitigating Risks in Development Projects, Including Sustainable Development GoalsThe Risk-Adjusted Method
6. The use of real options in assessing the effectiveness of development projects.
7. Evaluation of the Efficiency of Foreign Investments (FDI).
Ris
Type of course
Mode
Learning outcomes
Upon completion of the course, the student
In terms of Knowledge:
• Knows and understands research methodology and terminology in the fields of investments, development projects, financial planning, capital budgeting, and project efficiency assessment (C_K01).
• Knows and understands the principles, methods, and procedures for evaluating the efficiency of projects executed in various formats, such as corporate finance and project finance (S1_C02) (C_K02).
• Exhibits a deep understanding of the theory and conceptual models of both traditional and non-traditional methods for assessing project efficiency (S1_C03) (C_K03).
• Knows and understands methods for identifying, diagnosing, and solving problems related to project implementation and efficiency assessment, including risk factors (S1_C05) (C_K05).
In terms of Skills:
• Is able to apply the theory of corporate financial management to identify, diagnose, and solve problems related to the evaluation of development projects (S1_S01) (C_S01).
• Can conduct the process of assessing the efficiency of projects implemented in different formats (corporate finance and project finance), considering complex social, political, legal, economic, and ecological processes, and forecasting their impact on project efficiency and associated risks (S1_S02) (C_S02).
• Independently and collaboratively prepares analyses, diagnoses, and reports, taking into account complex processes affecting the efficiency of investment projects (S1_S03) (C_S03).
• Can plan and organize individual and team work in the process of preparing financial plans and evaluating development projects (S1_S04) (C_S05).
In terms of Attitudes:
• Is ready to assess and critically approach complex situations and phenomena related to financial management in organizations, accounting, management of financial institutions, and the strategies of financial institutions (S1_A02) (C_A01).
• Is ready to think and act entrepreneurially (S1_A02) (C_A02).
Assessment criteria
The learning assessment will be based on:
1. A written final exam (multiple-choice questions and 2 problem-solving tasks).
2. A team project (3-4 students).
The weight of each assessment component will be as follows:
• Final exam – 80%
• Group project – 20%
Bibliography
Basic Literature:
1. Anna Chmielewska, Rafał Cieślik ,Mariusz Lipski, Marta Postuła (2023), Projekty inwestycyjne. Jak nie wpaść w pułapkę (nie)zrównoważonego rozwoju, Difin.
2. Rafał Cieślik, Marta Postuła (red. nauk), (2016). Projekty inwestycyjne. Finansowanie, budżetowanie, ocena efektywności, Wydawnictwo: DIFIN
Supplementary Literature:
3. Paolo Taticchi, Melissa Demartini (2020) Corporate Sustainability in Practice: A Guide for Strategy Development and Implementation. Springer Nature.
4. Rogowski W. (2013). Rachunek efektywności inwestycji - Wyzwania teorii i potrzeby praktyki, Wydawnictwo: Wolters Kluwer
5. Gatti s. (2013), Project Finance in Theory and Practice: Designing, Structuring, and Financing Private and Public Projects, Academic Press
6. Bodmer E. (2014). Corporate and Project Finance Modeling: Theory and Practice, Wiley
7. Baker H.K (editor)., English P. (editor), (2012). Capital Budgeting Valuation: Financial Analysis for Today's Investment Projects, Wiley
Additional information
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