Making Capital Investment Decisions
One of the most important aspects of a manager's job is to evaluate the feasibility of new initiatives and to make sound investment decisions. This includes conducting a thorough and reliable analysis using the appropriate financial decision-making tools.
In this course, participants will learn six capital budgeting rules that provide a framework for making sound project investment decisions. Participants will examine how the rules differ from one another, and which rules are most appropriate for different project settings.
Participants in this course will need one of the following financial calculators…
- Hewlett-Packard 12C
- Texas Instruments BA II Plus
Who Should Take this Course?
This course is important for managers, supervisors, and team leaders at any level responsible for project planning, purchasing decisions, capital budgeting projects, and other important initiatives for their organization.
Participants who complete this course will be able to...
- Apply capital budgeting decision rules to make sound financial choices
- Accurately analyze decisions and projects for financial soundness
Module 1 - Introduction to Capital Budgeting Rules
- Hurdle Rates and Opportunity Costs
- The Critical Importance of Capital Budgeting Analysis
- Return on Invested Capital (ROIC)
Module 2 - Net Present Value
- Conceptualize the Net Present Value (NPV)
- Calculate NPV - Fixed Cash Flows
Module 3 - Internal Rate of Return
- Calculate the Internal Rate of Return (IRR) - Fixed Cash Flows
- Practice with IRR and NPV
Module 4 - Payback Period
- Introduction to the Payback Period (PBP)
- Using PBP
- What is the Discounted Payback Period (DPBP)?
Module - 5 - Profitability Index and Equivalent Annual Cost
- Introduction to the Profitability Index (PI) and Equivalent Annual Cost (EAC)
Module 6 - Final Assignments
- Verify Discussion Participation
- Write a Memo to the Boss
- Making Capital Investment Decisions Action Plan
- Scott Gibson, Professor of Finance and J.E. Zollinger Term Professor, The College of William & Mary School of Business
- Steven Carvell, Professor;Academic Director of the Center for Real Estate and Finance, School of Hotel Administration