Capital Budgeting Overview - Online

This introductory course draws upon both finance theory and practical applications to help managers understand key concepts that underlie analysis and execution of financial decisions.

This course replicates the content from lesson 4 of Corporate Finance - Online

This is an asynchronous eLearning course that can be accessed 24/7 from any internet enabled computer. Subscription period for this course is 90 days.

Available TodayOnlineUSD$60.00
Instructional Method:
Self-Study
Level: Basic
CPE Credits: 1

Individuals in credit, investment banking, corporate finance, and sales and trading.
Students will be able to:
  • Recognize the advantages of using Net Present Value versus Internal Rate of Return to calculate the value of a project.
  • Recall when and how to use the profitability index to rank the value of a project.
  • Determine the value of projects that have different life spans using the approaches called lowest common denominator and annual equivalency cash flow.
  • Recognize the formulas for the after-tax weighted average cost of capital and capital asset pricing model and how they are used to determine the cost of capital.
  • Identify the formulas for calculating cash flows resulting from investments and how they are used to determine the profitability of a project.
Capital Budgeting Overview
  • Merits of using net present value vs. internal rate of return
  • Special capital budget problems
  • Examples: capital rationing, projects of different lives
  • After-tax weighted average cost of capital as discount rate
  • Calculating cost of debt, equity and cash flows on investments