Risk and Return: How to Identify, Measure, and Incorporate Into Capital Budgeting Decisions
In today’s competitive market, every financial decision a firm makes is a balancing act between risk and return. Understanding how the risk-return relationship is incorporated into capital-budgeting decisions is an important role of a manager. Having the right tools to identify relevant project risks and weigh those risks against expected returns is crucial to this role.
This two-week course provides non-financial managers with an understanding of the key factors that enter into capital budgeting decisions so they are better able to engage in meaningful dialogue with the firm’s finance team.
Using the tools provided in this course, participants will learn how to measure risk and calculate the weighted average of the required return. They will learn how to explain why risk is a critical component of the capital-budgeting decision and what its impact is on choosing the right capital projects.
Who Should Take this Course?
This course is designed for non-financial managers who are responsible for making integrated financial decisions and need to be able to understand the interrelationship of risk and return in making capital budgeting decisions.
Participants who complete this course will be able to…
- Explain how risk enters into the capital budgeting decision and the impact it will have on the ultimate value of the investment under consideration
- Interpret what you read in the Wall Street Journal
- Steven Carvell, Ph.D., Professor , School of Hotel Administration, Cornell SC Johnson College of Business
- Scott Gibson, Ph.D., Professor of Finance and J.E. Zollinger Term Professor , The College of William & Mary School of Business
Estimated Hours to Complete Course: 6.0
About the School of Hotel Administration at the Cornell SC Johnson College of Business
The School of Hotel Administration at the Cornell SC Johnson College of Business is shaping the global knowledge base for hospitality management through leadership in education, research, and industry advancement. Accredited by the Association to Advance Collegiate Schools of Business (AACSB), the school provides management instruction in the full range of hospitality disciplines, educating the next generation of leaders in the world's largest industry. Founded in 1922 as the nation's first collegiate course of study in hospitality management, the Cornell School of Hotel Administration is recognized as the world leader in its field.