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Saeyeul Park
In the previous course, you learned financial statement analysis and how to make estimate of future financial status. In this course, you are going to learn capital budgeting. That is, how to make an investment decision. You would like to select the best project among various projects you can take. Then, you need to know the criteria. In this course, you are going to learn investment decision criteria such as NPV and IRR, which are most popular decision rules. Using financial analysis and discounted cash flow method, you can make pro forma financial statement and estimate project cash flows. Then, you apply investment criteria to determine whether to invest or not. After learning how to apply NPV and IRR method to investment decision, you are going to learn how to evaluate NPV estimate and scenario, what-if analyses and break-even analysis. In addition to NPV and IRR, you are going to learn Payback period method and Profitability method to determine whether to invest or not when there is a political risk or capital rationing.
Register for this course and see more details by visiting:
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What's inside
Syllabus
Capital Budgeting techniques
Capital budgeting is the process of deciding whether to undertake an investment project. In this module, you will study the three most popular capital budgeting techniques in practice: Net present value (NPV), Payback period, and Internal rate of return (IRR).
Read more
Syllabus
Capital Budgeting techniques
Capital budgeting is the process of deciding whether to undertake an investment project. In this module, you will study the three most popular capital budgeting techniques in practice: Net present value (NPV), Payback period, and Internal rate of return (IRR).
Read more
Project Analysis
In this module, you will learn how to estimate project cash flows using Excel. Overall, project cash flow analysis is similar to firm-level cash flow analysis. However, there also exist some unique features of a project cash flow analysis, which requires us to study the project cash flow principles.
Issues in Capital Budgeting
Sometimes you have to evaluate multiple projects at a time. In this module, you will learn how to choose the best project among multiple projects. We will also discuss various important issues in NPV and IRR techniques. Finally, we discuss the fundamental principle in choosing the discount rate.
Real Options in Business Projects
We continue to study analyzing business projects, but the difference in this module is that now we consider the value of "real options" embedded in the project. You will learn how to estimate the project's value by using the decision tree approach or the Black-Scholes option pricing model.
Good to know
Good to know
Know what's good ,
what to watch for , and
possible dealbreakers
Teaches capital budgeting techniques, which are widely used by businesses to determine the potential profitability of an investment project
Guides learners in using financial analysis and discounted cash flow method, which are industry-standard techniques to estimate project cash flows
Emphasizes on investment criteria such as NPV and IRR, which are crucial in making informed investment decisions
Enables learners to evaluate NPV estimates and scenarios, fostering critical thinking and decision-making abilities
Provides insights into real options in business projects, empowering learners to consider the value of flexibility and optionality in investment decision-making
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Save Applying Investment Decision Rules for Startups to your list so you can find it easily later:
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Reviews summary
Helpful course for investment decision rules
learners say this course provides helpful instruction on how to evaluate investment projects. According to students, the materials are well explained and insightful. It is challenging, but leavers find it useful. Some students wish the course included more business strategy and provided solutions to practice questions.
It is a challenging yet useful course.
"Very Challenging but insightful and useful"
"All things are explained in a well manner..!! Helped a LOT..!"
Clear explanations of investment decisions
"All things are explained in a well manner.... Helped a LOT..!"
"How to evaluate projects was well taught"
This course should provide solutions to practice questions.
"It would be great to have the solution after you get the certificate of the questions that you did not get right."
The course should cover more business strategies.
"good course but only excel skills i want more business stragy"
Activities
Be better prepared
before
your course. Deepen your understanding
during
and
after
it. Supplement your coursework and achieve mastery of the topics covered
in Applying Investment Decision Rules for Startups with these
activities:
Review Financial Statement Analysis
Show steps
Strengthen your foundation in financial statement analysis, a prerequisite for understanding investment decision criteria.
Browse courses on
Financial Statement Analysis
Show steps
-
Review the concepts of financial statements, including the balance sheet, income statement, and cash flow statement
-
Identify key financial ratios and their significance
-
Practice analyzing financial statements to assess a company's financial health
Review Net Present Value (NPV)
Show steps
Reinforce your understanding of the concept of Net Present Value (NPV) to better grasp the investment decision criteria taught in this course.
Browse courses on
Net Present Value
Show steps
-
Recall the formula for calculating NPV
-
Identify the components of the NPV formula, including cash flows, discount rate, and project life
-
Interpret the results of an NPV calculation
Excel Tutorial for Project Cash Flow Analysis
Show steps
Enhance your proficiency in using Excel for project cash flow analysis, a crucial skill for applying the investment decision criteria taught in this course.
Show steps
-
Follow a step-by-step tutorial on creating a project cash flow model in Excel
-
Learn how to use Excel functions and formulas to calculate cash flows
-
Practice applying the Excel model to different project scenarios
Five other activities
Expand to see all activities and additional details
Show all eight activities
NPV and IRR Discussion Group
Show steps
Engage with peers to discuss and clarify concepts related to NPV and IRR, fostering a deeper understanding of the material.
Show steps
-
Attend a discussion group focused on NPV and IRR
-
Participate in discussions and ask questions to enhance your understanding
-
Collaborate with peers to solve problems and share insights
NPV and IRR Practice Problems
Show steps
Solidify your understanding of NPV and IRR by solving a variety of practice problems.
Show steps
-
Solve NPV and IRR problems using the provided formulas
-
Analyze the results and make investment decisions based on the calculations
-
Compare the results of NPV and IRR to identify their advantages and limitations
Investment Analysis and Portfolio Management
Show steps
Expand your knowledge and gain insights by reading a comprehensive book on investment analysis and portfolio management, supplementing the course material with additional perspectives.
View
Investment Analysis & Portfolio Management
on Amazon
Show steps
-
Read selected chapters or sections of the book
-
Take notes and highlight key concepts
-
Consider the book's insights in relation to the course material
Investment Decision Report
Show steps
Apply your knowledge of investment decision criteria by creating a comprehensive report that analyzes and evaluates multiple investment projects.
Show steps
-
Gather information on different investment projects
-
Calculate NPV and IRR for each project
-
Analyze the results and make recommendations on which projects to invest in
-
Write a report summarizing your findings and justifying your recommendations
Contribute to an Open-Source Project on Investment Analysis
Show steps
Gain practical experience and contribute to the community by working on an open-source project related to investment analysis.
Show steps
-
Identify an open-source project on GitHub or other platforms
-
Review the project documentation and codebase
-
Contribute to the project by fixing bugs, adding features, or improving documentation
Review Financial Statement Analysis
Show steps
Strengthen your foundation in financial statement analysis, a prerequisite for understanding investment decision criteria.
Browse courses on
Financial Statement Analysis
Show steps
Show steps
Show steps
- Review the concepts of financial statements, including the balance sheet, income statement, and cash flow statement
- Identify key financial ratios and their significance
- Practice analyzing financial statements to assess a company's financial health
Review Net Present Value (NPV)
Show steps
Reinforce your understanding of the concept of Net Present Value (NPV) to better grasp the investment decision criteria taught in this course.
Browse courses on
Net Present Value
Show steps
Show steps
Show steps
- Recall the formula for calculating NPV
- Identify the components of the NPV formula, including cash flows, discount rate, and project life
- Interpret the results of an NPV calculation
Excel Tutorial for Project Cash Flow Analysis
Show steps
Enhance your proficiency in using Excel for project cash flow analysis, a crucial skill for applying the investment decision criteria taught in this course.
Show steps
Show steps
Show steps
- Follow a step-by-step tutorial on creating a project cash flow model in Excel
- Learn how to use Excel functions and formulas to calculate cash flows
- Practice applying the Excel model to different project scenarios
Five other activities
Expand to see all activities and additional details
Show all eight activities
NPV and IRR Discussion Group
Show steps
Engage with peers to discuss and clarify concepts related to NPV and IRR, fostering a deeper understanding of the material.
Show steps
Show steps
Show steps
- Attend a discussion group focused on NPV and IRR
- Participate in discussions and ask questions to enhance your understanding
- Collaborate with peers to solve problems and share insights
NPV and IRR Practice Problems
Show steps
Solidify your understanding of NPV and IRR by solving a variety of practice problems.
Show steps
Show steps
Show steps
- Solve NPV and IRR problems using the provided formulas
- Analyze the results and make investment decisions based on the calculations
- Compare the results of NPV and IRR to identify their advantages and limitations
Investment Analysis and Portfolio Management
Show steps
Expand your knowledge and gain insights by reading a comprehensive book on investment analysis and portfolio management, supplementing the course material with additional perspectives.
View
Investment Analysis & Portfolio Management
on Amazon
Show steps
Show steps
Show steps
- Read selected chapters or sections of the book
- Take notes and highlight key concepts
- Consider the book's insights in relation to the course material
Investment Decision Report
Show steps
Apply your knowledge of investment decision criteria by creating a comprehensive report that analyzes and evaluates multiple investment projects.
Show steps
Show steps
Show steps
- Gather information on different investment projects
- Calculate NPV and IRR for each project
- Analyze the results and make recommendations on which projects to invest in
- Write a report summarizing your findings and justifying your recommendations
Contribute to an Open-Source Project on Investment Analysis
Show steps
Gain practical experience and contribute to the community by working on an open-source project related to investment analysis.
Show steps
Show steps
Show steps
- Identify an open-source project on GitHub or other platforms
- Review the project documentation and codebase
- Contribute to the project by fixing bugs, adding features, or improving documentation
Career center
Learners who complete Applying Investment Decision Rules for Startups will develop knowledge and skills
that may be useful to these careers:
Financial Analyst
Financial Analyst
Financial Analysts create financial models to guide business decisions, which includes evaluating capital budgeting projects. This course teaches you how to create these models, which will help you to succeed in this role. The course's teachings on NPV, IRR, and other techniques will allow you to accurately evaluate investment decisions and make recommendations on the best course of action. Additionally, if you choose to advance into management, the skills developed in this course will help you in decision-making.
Investment Banker
Investment Banker
Investment Bankers guide clients on financial decisions, which includes advising on mergers and acquisitions, capital budgeting, and other investment decisions. This course will specifically teach you how to use NPV, IRR, and other decision-making tools to effectively evaluate investment strategies and make recommendations to clients. The ability to create accurate financial models will be essential to your success as an Investment Banker.
Private Equity Associate
Private Equity Associate
A Private Equity Associate's job involves managing investment funds, which includes identifying, evaluating, and executing investment decisions. In this role, you will need to be able to evaluate the financial viability of potential investments. This course teaches the methods used to evaluate capital budgeting projects, which will allow you to more accurately assess the potential return on investment for different projects. The skills and knowledge developed in this course will help you to succeed in this role.
Venture Capitalist
Venture Capitalist
Venture Capitalists manage investment funds for high-growth startups. You will need to be able to evaluate the potential of a business to succeed, which includes analyzing financial data and making investment decisions. This course will teach you how to evaluate financial statements, estimate future financial status, and use NPV, IRR, and other tools to make investment decisions.
Portfolio Manager
Portfolio Manager
Portfolio Managers construct and manage investment portfolios for individuals and institutions. This includes making investment decisions and evaluating the performance of investments. This course will teach you how to analyze financial data, evaluate investment opportunities, and make informed investment decisions. The skills developed in this course will help you to succeed in this role.
Risk Manager
Risk Manager
Risk Managers evaluate and mitigate financial risks for companies. This includes identifying, assessing, and managing risks associated with investments. This course will teach you how to analyze financial data, identify risks, and develop strategies to mitigate those risks. The skills developed in this course will help you to succeed in this role.
Financial Planner
Financial Planner
Financial Planners help individuals and families plan for their financial future. This includes providing advice on investments, retirement planning, and other financial matters. This course will teach you how to analyze financial data, create financial plans, and make informed investment decisions. The skills developed in this course will help you to succeed in this role.
Actuary
Actuary
Actuaries use mathematical and statistical methods to assess and manage risks. This includes evaluating the financial impact of events such as death, disability, and retirement. This course will teach you how to analyze financial data, create financial models, and make informed financial decisions. The skills developed in this course will help you to succeed in this role.
Auditor
Auditor
Auditors examine and verify financial records to ensure accuracy and compliance with regulations. This includes evaluating financial data and identifying potential risks. This course will teach you how to analyze financial data, identify risks, and develop strategies to mitigate those risks. The skills developed in this course will help you to succeed in this role.
Tax Accountant
Tax Accountant
Tax Accountants prepare and file tax returns for individuals and businesses. This includes calculating taxes owed and advising clients on tax-related matters. This course will teach you how to analyze financial data and apply tax laws to calculate tax liabilities. The skills developed in this course will help you to succeed in this role.
Forensic Accountant
Forensic Accountant
Forensic Accountants investigate financial crimes and provide expert testimony in court. This includes analyzing financial data and identifying evidence of fraud or other wrongdoing. This course will teach you how to analyze financial data, identify risks, and develop strategies to mitigate those risks. The skills developed in this course will help you to succeed in this role.
Business Analyst
Business Analyst
Business Analysts analyze business processes and identify areas for improvement. This includes evaluating financial data and making recommendations on how to improve operational efficiency. This course will teach you how to analyze financial data and create financial models, which will help you to identify areas for improvement and make sound recommendations.
Management Consultant
Management Consultant
Management Consultants provide advice to businesses on how to improve their operations. This includes evaluating financial data and making recommendations on how to improve profitability and efficiency. This course will teach you how to analyze financial data and create financial models, which will help you to develop effective recommendations for businesses.
Data Scientist
Data Scientist
Data Scientists use data and statistical methods to solve business problems. This includes analyzing financial data to identify trends and patterns. This course will teach you how to analyze financial data and create financial models, which will help you to develop data-driven solutions for business problems.
Operations Research Analyst
Operations Research Analyst
Operations Research Analysts use mathematical and statistical methods to solve business problems. This includes developing models to optimize business processes. This course will teach you how to create financial models, which will help you to develop effective solutions for business problems.
For more career information including salaries, visit:
OpenCourser.com/course/2xdazf/applying
Reading list
We've selected 28 books
that we think will supplement your
learning. Use these to
develop background knowledge, enrich your coursework, and gain a
deeper understanding of the topics covered in
Applying Investment Decision Rules for Startups.
This advanced textbook by Aswath Damodaran covers a wide range of advanced topics in corporate finance, including capital budgeting and valuation. It provides a comprehensive treatment of theoretical concepts and practical applications, making it a valuable resource for students pursuing advanced studies in finance.
Provides a comprehensive overview of capital budgeting, including topics such as project analysis, capital rationing, and real options.
This handbook provides a comprehensive overview of project finance, including topics such as project analysis, capital budgeting, and real options.
Widely used textbook on capital budgeting, providing a comprehensive overview of the theories and practices of investment decision-making. It includes in-depth explanations of NPV, IRR, payback period, and other investment criteria, as well as advanced topics like real options and capital rationing.
Provides a more in-depth treatment of capital budgeting techniques. It includes case studies and examples to help students apply the concepts they learn.
This practical guide to financial modeling and valuation covers building financial models for various purposes, including capital budgeting. It teaches you how to use Excel and other tools to create and analyze financial models, which valuable skill for investment professionals.
Classic text on investing. It provides a wealth of wisdom and advice on how to invest wisely. It is commonly used as a textbook at academic institutions or by industry professionals.
Provides a comprehensive overview of project management, including topics such as project planning, scheduling, and controlling.
Provides a step-by-step guide to using Microsoft Excel to perform financial modeling, including topics such as project analysis, capital budgeting, and real options.
Offers a practical approach to financial analysis and valuation, covering topics such as financial statement analysis, valuation techniques, and investment decision-making. It provides real-world examples and case studies, making it valuable for both students and practitioners.
Save
This widely used textbook for investments, providing a thorough grounding in the principles of investing, including capital budgeting and portfolio management. It's a good resource if you're new to the subject or want a comprehensive overview.
This textbook provides a comprehensive overview of investment analysis and portfolio management, including topics such as capital budgeting, project evaluation, and real options.
Provides a step-by-step guide to using Microsoft Excel to perform financial analysis, including topics such as project analysis, capital budgeting, and real options.
Save
This comprehensive textbook covers a wide range of corporate finance topics, including capital budgeting. It provides a thorough explanation of the theoretical foundations of capital budgeting techniques, as well as practical guidance on their application in real-world scenarios.
Save
Provides a practical guide to project management, including topics such as project planning, scheduling, and controlling.
Classic text on security analysis. It provides a comprehensive overview of the theory and practice of security analysis.
While not directly focused on capital budgeting, this classic book by Benjamin Graham provides valuable insights into investment principles and risk management, which are essential for making sound investment decisions. It emphasizes the importance of understanding the intrinsic value of investments and avoiding speculative behavior.
This article explores the use of scenario analysis in investment appraisal, focusing on its application in capital budgeting. It provides a practical guide on how to conduct scenario analysis and incorporate it into investment decision-making.
Provides a comprehensive overview of financial analysis and investment decisions. It valuable resource for anyone who wants to learn more about this topic.
Provides a concise overview of project management, including topics such as project planning, scheduling, and controlling.
Provides a concise overview of project risk management, including topics such as identifying, assessing, and mitigating risks.
Save
While not specifically focused on capital budgeting, this book provides insights into the private equity industry, which often involves complex investment decisions. It explains the different stages of the private equity process and the various investment strategies used. This knowledge can be helpful for students interested in pursuing careers in finance or investment.
Provides a comprehensive overview of investment analysis and portfolio management. It valuable resource for anyone who wants to learn more about this topic.
Provides a comprehensive overview of corporate finance. It valuable resource for anyone who wants to learn more about this topic. It adds more depth and breadth to the existing course.
Save
Provides a comprehensive overview of financial management. It valuable resource for anyone who wants to learn more about this topic.
Provides a comprehensive overview of investments. It valuable resource for anyone who wants to learn more about this topic.
Provides a comprehensive overview of portfolio management. It valuable resource for anyone who wants to learn more about this topic. It useful reference tool.
Provides a comprehensive overview of fixed income securities. It valuable resource for anyone who wants to learn more about this topic.
For more information about how these books relate to this course, visit:
OpenCourser.com/course/2xdazf/applying
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Level
Introductory
Via
Coursera
Institution
Yonsei University
Instructor
Saeyeul Park
Language
English
Transcripts
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This course belongs to a
collection
called
Valuation and Financial Analysis For Startups. It's comprised of five courses:
- Valuation for Startups Using Discounted Cash Flows Approach
- Financial Analysis for Startups
- Valuation and Financial Analysis For Startups Capstone
- Applying Investment Decision Rules for Startups (viewing)
- Valuation for Startups Using Multiple Approach
Good to know
Teaches capital budgeting techniques, which are widely used by businesses to determine the potential profitability of an investment project
Guides learners in using financial analysis and discounted cash flow method, which are industry-standard techniques to estimate project cash flows
Emphasizes on investment criteria such as NPV and IRR, which are crucial in making informed investment decisions
Enables learners to evaluate NPV estimates and scenarios, fostering critical thinking and decision-making abilities
Provides insights into real options in business projects, empowering learners to consider the value of flexibility and optionality in investment decision-making
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