Financial Decision Rules for Project Evaluation

In this finance course, learners will be exposed to real world decision-making rules used to prioritize projects, with several rich applications. The specific decision rules we will analyze include:

• Payback
• Internal Rate of Return
• Net Present Value

The relation between these different decision rules and value creation, or equivalently shareholder wealth maximization, will be emphasized. The foundational framework of time value of money will be used to introduce the concepts and applications, and to critically evaluate the strengths and weaknesses of alternative decision criteria. This will be followed by an exposure to the valuation of bond/debt and stocks/shares. This course will also involve some basic exposure to how the profitability of projects is measured in the real world.

This course is targeted to managers working in corporations or institutions and individuals planning to pursue a graduate degree in business (MBA).

This course is the first of four in the Corporate Financial Analysis XSeries Learn how to use decision criteria and rules to evaluate projects based on their impact on business, including payback, NPV and IRR.