Fundamentals of Financial Mathematics and Capital Budgeting from edX

This course begins with a look at the determinants of value. We will cover two main approaches to valuing businesses as going concerns, discounting cash flows and valuation ratios, including the inputs needed to perform the calculations and how each deal with risk.

We then proceed to look at the time value of money concepts - present value and future value and the role interest rates plays in the calculation of each. This course also covers the impact of different compounding frequencies and explains the methodologies used to make comparisons between interest rates based on different compounding conventions.

We’ll learn how to calculate the future value of lump sums and cash flow streams (including period certain annuities) as well as calculate the present value of lump sums, cash flow streams (including period certain annuities and perpetuities—both constant and growing).

The course also covers in in detail the three main approaches to capital budgeting decisions (Payback, Internal Rate of Return and Net Present Value Analysis), including the conceptual framework, input values and decision rules for each. We’ll wrap up this course with a look at the strengths and weaknesses of each of three main approaches to capital budgeting decisions and modification to Payback and IRR that attempt to address the shortcomings of each.

This course is part 1 of the New York Institute of Finance’s Corporate Finance & Valuation Methods Professional Certificate.

Free Preview! Access Module 1 for free. For full course access, upgrade to a verified certificate.

What's inside

Learning objectives

Determinants of value
Foundations of financial mathematics

Capital budgeting

Determinants of value
Foundations of financial mathematics
Capital budgeting

Syllabus

Mod 01: Determinants of Value (Audit this module for Free)

Mod 02: Foundations of Financial Mathematics

Mod 03: Capital Budgeting

Good to know

Know what's good

, what to watch for

, and possible dealbreakers

Provides a solid foundation for professional development in corporate finance

Content is presented in a clear and organized manner

Incorporates real-world examples and case studies

Taught by instructors with extensive industry experience

Course certificate is offered by a reputable institution

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 Fundamentals of Financial Mathematics and Capital Budgeting with these activities:

Review algebra and calculus concepts

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Brush up on foundational mathematical concepts that will be used throughout the course.

Browse courses on Algebra

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Review notes from previous algebra and calculus courses.
Complete practice problems online.
Attend a review session or workshop.

Read 'Financial Modeling' by Simon Benninga

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Complement your understanding of financial modeling concepts with a comprehensive text.

View Financial Modeling, fifth edition on Amazon

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Purchase or borrow the book.
Read the book thoroughly, taking notes and highlighting key concepts.
Complete the practice exercises at the end of each chapter.

Watch video tutorials on capital budgeting techniques

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Gain a deeper understanding of capital budgeting techniques through expert-led video tutorials.

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Find video tutorials on YouTube or other online platforms.
Take notes while watching the tutorials.
Test your understanding by completing practice problems.

Six other activities

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Practice calculating time value of money

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Master the concepts of time value of money and their practical applications.

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Find practice problems online or in textbooks.
Use a financial calculator or spreadsheet to solve problems.
Attend a workshop or training session on time value of money.

Participate in online discussions and forums

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Connect with peers, share insights, and get feedback on your understanding of course concepts.

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Join online discussion forums or groups.
Post questions and share your thoughts.
Respond to other participants' posts.

Practice valuing businesses using different methods

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Reinforce your understanding of business valuation techniques by practicing on real-world examples.

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Find practice problems online or in textbooks.
Join a study group and work through problems together.
Attend a workshop or training session on business valuation.

Create a mind map summarizing key concepts

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Enhance your understanding by visually organizing and connecting key concepts in a mind map.

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Identify the main topics and subtopics of the course.
Use a mind mapping tool or software.
Connect the concepts using branches and sub-branches.

Organize and review course materials regularly

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Stay organized and enhance retention by regularly reviewing and整理ing course materials.

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Create a system for organizing notes, assignments, and quizzes.
Dedicate time each week to review and整理 materials.
Use flashcards or other memorization techniques to reinforce key concepts.

Contribute to open-source projects related to financial analysis

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Gain hands-on experience in applying financial analysis techniques through open-source projects.

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Find open-source projects on platforms like GitHub.
Identify areas where you can contribute your skills.
Submit pull requests with your contributions.

Career center

Learners who complete Fundamentals of Financial Mathematics and Capital Budgeting will develop knowledge and skills that may be useful to these careers:

Risk Manager

Risk Managers identify, assess, and mitigate financial risks for organizations. This course can help build a foundation for this role by providing a strong understanding of the determinants of value, the time value of money, and capital budgeting. These concepts are essential for assessing and managing financial risks.

See salaries and explore the career path for Risk Manager

Financial Planner

Financial Planners help individuals and families plan for their financial futures. This course can help build a foundation for this role by providing a strong understanding of the determinants of value, the time value of money, and capital budgeting. These concepts are essential for understanding how to create and manage a financial plan.

See salaries and explore the career path for Financial Planner

Credit Analyst

Credit Analysts assess the creditworthiness of borrowers. This course can help build a foundation for this role by providing a strong understanding of the determinants of value, the time value of money, and capital budgeting. These concepts are essential for understanding how to assess the risk of default.

See salaries and explore the career path for Credit Analyst

Auditor

Auditors examine financial records to ensure accuracy and compliance. This course can help build a foundation for this role by providing a strong understanding of the determinants of value, the time value of money, and capital budgeting. These concepts are essential for understanding how businesses are valued and how financial statements are prepared.

See salaries and explore the career path for Auditor

Financial Analyst

Financial Analysts are responsible for evaluating and forecasting financial trends and risks. This course, Fundamentals of Financial Mathematics and Capital Budgeting, can help build a foundation for this role by providing a strong understanding of the determinants of value, the time value of money, and capital budgeting. These concepts are essential for understanding how businesses are valued and how investment decisions are made.

See salaries and explore the career path for Financial Analyst

Quantitative Analyst

Quantitative Analysts use mathematical and statistical models to analyze financial data. This course can help build a foundation for this role by providing a strong understanding of the determinants of value, the time value of money, and capital budgeting. These concepts are essential for understanding how to build and use financial models.

See salaries and explore the career path for Quantitative Analyst

Actuary

Actuaries use mathematical and statistical techniques to assess the financial risks associated with insurance and other financial products. This course can help build a foundation for this role by providing a strong understanding of the determinants of value, the time value of money, and capital budgeting. These concepts are essential for understanding how to quantify financial risks.

See salaries and explore the career path for Actuary

Investment Banker

Investment Bankers help companies raise capital and provide financial advice. This course can help build a foundation for this role by providing a strong understanding of the determinants of value, the time value of money, and capital budgeting. These concepts are essential for understanding how businesses are valued and how investment decisions are made.

See salaries and explore the career path for Investment Banker

Portfolio Manager

Portfolio Managers oversee and manage investment portfolios for clients. This course can help build a foundation for this role by providing a strong understanding of the determinants of value, the time value of money, and capital budgeting. These concepts are essential for understanding how businesses are valued and how investment decisions are made.

See salaries and explore the career path for Portfolio Manager

Strategy Consultant

Strategy Consultants help organizations develop and implement their strategies. This course can help build a foundation for this role by providing a strong understanding of the determinants of value, the time value of money, and capital budgeting. These concepts are essential for understanding how to develop and evaluate business strategies.

See salaries and explore the career path for Strategy Consultant

Data Scientist

Data Scientists use data to solve business problems. This course can help build a foundation for this role by providing a strong understanding of the determinants of value, the time value of money, and capital budgeting. These concepts are essential for understanding how to analyze data and make data-driven decisions.

See salaries and explore the career path for Data Scientist

Business Analyst

Business Analysts analyze business processes and make recommendations for improvement. This course can help build a foundation for this role by providing a strong understanding of the determinants of value, the time value of money, and capital budgeting. These concepts are essential for understanding how to analyze business processes and make sound business decisions.

See salaries and explore the career path for Business Analyst

Management Consultant

Management Consultants help organizations improve their performance. This course can help build a foundation for this role by providing a strong understanding of the determinants of value, the time value of money, and capital budgeting. These concepts are essential for understanding how to make sound business decisions.

See salaries and explore the career path for Management Consultant

Financial Controller

Financial Controllers oversee the financial operations of organizations. This course can help build a foundation for this role by providing a strong understanding of the determinants of value, the time value of money, and capital budgeting. These concepts are essential for understanding how to manage the financial resources of an organization.

See salaries and explore the career path for Financial Controller

Project Manager

Project Managers plan and execute projects. This course may be useful for Project Managers by providing a strong understanding of the determinants of value, the time value of money, and capital budgeting. These concepts are essential for understanding how to plan and manage projects.

See salaries and explore the career path for Project Manager