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Welcome to this crash course on Capital Budgeting Techniques.
This course is about Tools and Techniques available for evaluating Business Investment Opportunities.
Yes! Every business takes decisions with regard to Investments in Projects. It may be starting a New Business, Expansion of Existing Business, Modernisation, Backward and Forward Integration, etc.
But, how those decisions are taken by the Business entities? What Financial factors are evaluated before taking those decisions?
This course will give you overview about the process adopted.
There are various Capital Budgeting tools available which will evaluate Investment Opportunities and would tell us whether to take up or not to take up the projects and that process is called Capital Budgeting.
Capital budgeting is the process most companies use to authorize capital spending on long‐term projects and on other projects requiring significant investments of capital.
Capital budgeting is also concerned with the setting of criteria about which projects should receive investment funding to increase the value of the firm, and whether to finance that investment with equity or debt capital. Investments should be made on the basis of value-added to the future of the corporation.
Businesses should pursue all projects and opportunities that enhance shareholder value. However, because the amount of capital available at any given time for new projects is limited, management needs to use capital budgeting techniques to determine which projects will yield the most return over an applicable period of time.
Investment evaluation tools ranges from simple Pay Back Period, Accounting Rate of Return to cash discounting tools like NPV, IRR, MIRR, Profitability Index, etc.
Overviews covered in the course:
NPV can be described as the “difference amount" between the sums of discounted: cash inflows and cash outflows. It compares the present value of money today to the present value of money in the future, taking inflation and returns into account.
The (IRR) is defined as the discount rate that gives a NPV of zero. It is a commonly used measure of investment efficiency.
Need for Capital Budgeting:
WHO SHOULD ATTEND?
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|Section 1: Introduction|
What is Capital BudgetingPreview
|Section 2: Cash Flows|
Principles for Measuring Project Cash FlowsPreview
Discounted Pay Back Period Method
|Section 3: Tools available for Capital Budgeting|
Net Present Value MethodPreview
5 Case Study on NPV and Capital Rationing
Internal Rate of Return Method
Bonus Lecture - Discount Coupon Links for other Courses
I am a Chartered Accountant with tonnes of passion for teaching.
I teach Financial Management & Strategic Financial Management for Chartered Accountancy, Cost and Management Accountancy and Company Secretary students in Ernakulam, India. I also hold Post Graduate Diploma in Business Administration in Finance from Symbiosis, Pune and Bachelors in Commerce, from Loyola College, Chennai.
I worked in State Bank of India as Assistant Vice President - Credit for a period of four years after which i started my Chartered Accountancy Practice. During the stint in State Bank of India, I worked on credit proposals of Mid Corporate Units and gained good experience in Financial Analysis, Risk Assessment, Viability Study, Evaluating business models, Project Finance, Working Capital Management, etc.
I conduct work shops for Entrepreneurs, Chartered Accountancy / Cost and Management Accountancy Students on the topics like Project Finance, Credit Risk Assessment, Entrepreneurship Development, Finance for Non Finance Executives, etc.
I love teaching and i want fundamentals of accounting and finance to reach students and so i am here.