Analysis of project viability 2600-MSMz2zitAOP
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 Capital Rationing for Capital Budgeting
2. Capital budgeting – Financial Modeling and Controlling 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 Estimating Terminal Value In Financial Modelling
3.3 The Time Value of Money and Its Applications in Project Valuation
3.4 Importance and Use of Weighted Average Cost of Capital (WACC) and Its Applications in Project Valuation
4. Project Appraisal: Methods and Techniques
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. Project Analysis under Risk
5.1 The Risk-Adjusted Method
5.2 Sensitivity and Break-Even Analysis
5.3 Simulation Concepts and Methods
5.4 Risk Monitoring and Control
Type of course
Mode
Assessment criteria
Grading will be based on:
- final exam (including multiple choice test questions and tasks to solve) and
- final project (work in a group (3-4 students) on the final valuation project)
Grading in the course will be based on the following weights:
final exam - 80%
final project – 20%
The following criteria will be evaluated for each of the projects submitted:
- comprehensiveness of non-financial and financial assumptions adopted for the investment project,
- The accuracy of the selection of analytical methods and their implementation
Bibliography
Literatura podstawowa:
Cieślik R., Postuła M., (red. nauk), (2016). Projekty inwestycyjne. Finansowanie, budżetowanie, ocena efektywności, Wydawnictwo: DIFIN
Literatura uzupełniająca:
Rogowski W. (2013). Rachunek efektywności inwestycji - Wyzwania teorii i potrzeby praktyki, Wydawnictwo: Wolters Kluwer
Gatti s. (2013), Project Finance in Theory and Practice: Designing, Structuring, and Financing Private and Public Projects, Academic Press
Bodmer E. (2014). Corporate and Project Finance Modeling: Theory and Practice, Wiley
Baker H.K (editor)., English P. (editor), (2012). Capital Budgeting Valuation: Financial Analysis for Today's Investment Projects, Wiley
Additional information
Additional information (registration calendar, class conductors, localization and schedules of classes), might be available in the USOSweb system: