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Jamal Munshi PhD, All rights reserved 
The course Managers who do not invest in new projects cannot offer growth to shareholders. They may become acquisition targets. Those that make bad investments reduce shareholder value. Only those managers that can identify new capital investment opportunities and make the right capital budgeting decisions can consisently add shareholder value. The value of a project is the present value of future net cash flow forecasts computed using a discount rate that is adjusted for risk. Students learn to make capital budgeting decisions under various realworld conditions using this basic principle of value. Students are expected to have completed courses in the fundamentals of finance, accounting, and statistics. The course is quantitative in nature and it requires proficiency in mathematics and in Microsoft Excel. Proficiency in written English is also important. Textbook Neil Seitz and Mitch Ellison, Capital budgeting and long term financing decisions Harcourt Brace College Publishers, ISBN 0030237890 Classroom activities There are 8 class meetings on 8 consecutive weeks, one day per week, and one scheduled final examination period. There may be up to three activities per meeting Activity #1: Quiz on previous topic: 1 hour Activity #2: Lecture on new topic: 1.5 hours Activity #3: Workshop on new topic: 1.5 hours Meeting #1 Workshop #1: Introduction to NPV analysis To prepare for workshop #1 please read chapter 5 Meeting #2 Quiz #1: NPV analysis Workshop #2: IRR and other measures of value To prepare for workshop #2 please read chapter 6 Meeting #3 Quiz #2: IRR analysis Workshop #3: The analysis of mutually exclusive projects To prepare for workshop #3 please read chapter 7 Meeting #4 Quiz #3: Mutually exclusive projects with unequal lives Workshop #4: The estimation of net cash flows (NCF) To prepare for workshop #4 please read chapter 8 Meeting #5 Quiz #4: NCF computation Workshop #5: Standard deviation risk: risk analysis at the project level To prepare for workshop #5 please read chapter 12 Meeting #6 Quiz #5: Project level risk Workshop #6: Covariance risk: risk analysis at the firm level To prepare for workshop #6 please read chapter 13 Meeting #7 Quiz #6: Firm level risk Workshop #7: Beta risk: risk analysis at the market level To prepare for workshop #7 please read chapter 14 Meeting #8 Quiz #7: Beta risk Workshop #8: Estimation of the firm's cost of capital (WACC) To prepare for workshop #8 please read chapter 16 Scheduled final examination period Quiz #8: WACC Semester project (select one) Selected integrative case studies from the text Excel model, report, and presentation. Assignment types The class is divided into groups. Workshops and semester projects are group assignments. They are carried out cooperatively by group members working as a team. The instructor serves as an exofficio member of each group. Quizzes and examinations are individual assignements. Please do these on your own. You are expected to complete your quiz without using your book or notes. Please turn in your workshop before you take the quiz. For group assignments submit one paper per group. For individual assignments submit one paper per student. Missed workshops and quizzes Once per term, the student may carry the weight of a missed workshop forward to the next workshop. Once per term, the student may carry the weight of a missed quiz forward to the next quiz. There is no provision for makeup workshops or quizzes. Evaluation of learning 8 Workshops x 4 points each = 32 points 8 Inclass short quizzes x 8 points each = 64 points Semester project = 4 points Total = 100 points Letter grade: 90100 = A, 8090 = B, 7580 = B, 6075 = D, else F Outcomes After completing this course you should be able to answer all of these questions:

