This class exists in these courses :
• IÉSEG > IESEG Degree - Programme Grande École > Semester 1 > 2,00 ECTS

Prerequisites

Introduction to Financial Markets
Corporate Finance Fundamentals
Capital Structure (strongly recommended)
Statistics and Probability in Finance.

Learning outcomes

At the end of the course, the student should be able to:

1. Identify the steps involved in estimating the cash flows from investment projects
2. Differentiate between a relevant and an irrelevant cash flow
3. Analyze a project's risks and opportunities
4. Evaluate project's profitability, return and payback period
5. Understand the interactions between investment and financing decisions
6. Assess the various managerial flexibilities involved in the project

Course description

This course is an in-depth exploration of methods used in corporate investment appraisal, with a focus on practical applications of project valuation methods.

Course outline:

Part I: Estimating the incremental cash flows
Part II: Estimating the cost of capital for project valuation purposes
Part III: Project Valuation Methods
Part IV: Managerial Flexibility and Project Appraisal

Class type

Class structure

Teaching methods

• Case study
• Coaching
• Interactive class
• Presentation
• Project work
• Tutorial

Assessment

Students will discuss 4 case studies in class, each related to one of the four parts of the course. Students will then have to work on a final case study outside the class.

Recommended reading

• Valuation: The Art and Science of Corporate Investment Decisions - Titman, S., and Martin, J. Prentice Hall. 1st edition 2008 -

• Advanced Capital Budgeting. Refinements in the economic analysis of investment projects. -Bierman, H. and Smidt, S. Routledge 1st edition 2007 -

• Capital Budgeting and Long-Term Financing Decisions. - Seitz, N. and Ellison, M. South-Western 4th edition 2005 -

Internet resources

• Damodaran on Valuation