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Decision-Making and Scenarios

Richard Lambert and Robert W. Holthausen

4.6

Based on 1,729 ratings

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Richard Lambert and Robert W. Holthausen

This course is designed to show you how use quantitative models to transform data into better business decisions. You’ll learn both how to use models to facilitate decision-making and also how to structure decision-making for optimum results. Two of Wharton’s most acclaimed professors will show you the step-by-step processes of modeling common business and financial scenarios, so you can significantly improve your ability to structure complex problems and derive useful insights about alternatives. Once you’ve created models of existing realities, possible risks, and alternative scenarios, you can determine the best solution for your business or enterprise, using the decision-making tools and techniques you’ve learned in this course.

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What's inside

Syllabus

Evaluation Criteria: Net Present Value

This module was designed to introduce you to the many potential criteria for selecting investment projects, and to explore the most effective of these criteria: Net Present Value (NPV). Through the use of concrete examples, you'll learn the key components of Net Present Value, including the time value of money and the cost of capital, the main utility of NPV, and why it is ultimately more accurate and useful for evaluating projects than other commonly used criteria. By the end of this module, you'll be able to explain why net present value analysis is the appropriate criteria for choosing whether to accept or reject a project, and why other criteria, such as IRR, payback, ROI, etc. may not lead to decisions which maximize value.

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Examines financial terms and risks, which are key principles of business and finance

Provides concrete examples and case studies to reinforce learning

Introduces financial modeling with NPV, a widely-used technique in the industry

Provides opportunities to apply knowledge to real-world business scenarios

Taught by Wharton professors, known for their expertise in finance and business

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Reviews summary

Quantitative business decision making with npv

According to learners, this course on Decision-Making and Scenarios provides a solid foundation in using quantitative methods for business decisions, focusing heavily on Net Present Value (NPV) and financial modeling. Students often praise the excellent instructors, finding their explanations clear and the overall content highly relevant for careers in finance and business. While many appreciate the practical examples and spreadsheet components, some reviewers note that the pace is fast and the course assumes prior business knowledge, potentially posing a warning for beginners. A minority also suggested more diverse practical application examples would enhance the learning experience.

Professors praised for clarity and expertise.

"Prof. Sinkin and Prof. Geczy are outstanding lecturers who make complex topics like NPV and financial modeling very accessible."

"The professors explain things clearly, and the step-by-step approach to building models is very helpful."

"Amazing course! The professors are truly experts and convey the information effectively."

"Loved this course! Clear explanations, great examples, practical skills. The professors are excellent."

Covers NPV and financial modeling exceptionally well.

"This course was excellent! ... I feel much more confident in structuring business problems and evaluating investments now. Highly recommended..."

"A solid introduction to quantitative decision making. The modules on NPV and evaluating projects were particularly strong."

"Fantastic course. ... It definitely delivered on its promise to help improve my ability to structure complex problems."

"Good overview of quantitative decision making tools. NPV, cash flows etc explained well. Spreadsheet part is key."

Some found exercises difficult to follow.

"The spreadsheet exercises were difficult to follow without clearer guidance."

"Spreadsheet part was hard to follow."

"Needed more hands on exercises."

Some wished for more practical application.

"Content is good theoretically, covering NPV and financial statements, but lacked practical application examples for non-finance people."

"It's too focused on theory and not enough on practical application in real-world business scenarios."

"Expected more modern decision analysis techniques."

Some learners found the course moved quickly.

"Sometimes the pace felt a bit fast, especially in the later modules dealing with financial statements."

"The pace was fast, and some concepts felt rushed."

May be challenging for beginners or non-finance backgrounds.

"It requires prior basic finance knowledge."

"I think it assumes a certain level of business background. For someone completely new to finance, it might be overwhelming."

"Not suitable for beginners..."

"Solid material on NPV and financial modeling. Useful for finance roles. Might be too advanced for non-finance background or beginners."

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 Decision-Making and Scenarios with these activities:

Review basic accounting principles

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Review the fundamental concepts of accounting, such as debits and credits, the balance sheet, and the income statement, to strengthen your understanding of financial modeling.

Browse courses on Accounting Basics

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Read introductory accounting materials (e.g., textbooks, articles, online resources).
Solve practice problems or take online quizzes to test your understanding of basic concepts.
Attend a workshop or seminar on accounting basics.

Compile a glossary of financial terms and concepts

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Create a comprehensive glossary of key financial terms and concepts covered in the course, including definitions, examples, and real-world applications. This resource will serve as a valuable reference tool for future use.

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Identify and list important financial terms and concepts from course materials.
Define each term or concept concisely and clearly.
Include examples or real-world applications to illustrate the meaning.

Review Fundamentals of Corporate Finance

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Review the basics of corporate finance. This book will describe the principles and practice of corporate finance from the perspective of managers and investors.

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Read Chapter 1: Introduction
Read Chapter 2: The Financial System

Ten other activities

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Watch Videos on Financial Modeling

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Expand your knowledge of financial modeling by watching videos from experts.

Browse courses on Financial Modeling

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Watch a video on how to build a financial model in Excel
Watch a video on how to use financial modeling to make better investment decisions

Learn how to use Excel for financial modeling

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Become proficient in using Excel's financial functions and tools, such as NPV, IRR, and data tables, to enhance your ability to create and analyze financial models.

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Enroll in an online course or workshop on Excel for financial modeling.
Follow tutorials on specific Excel functions and techniques.
Practice using Excel to solve financial modeling problems.

Solve NPV and IRR Practice Problems

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Practice applying NPV and IRR to evaluate investment projects. This will help you understand how to use these techniques to make better investment decisions.

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Solve 5 NPV practice problems
Solve 5 IRR practice problems

Attend a Financial Modeling Workshop

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Learn from experts in the field of financial modeling by attending a workshop.

Browse courses on Financial Modeling

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Research financial modeling workshops
Register for a workshop

Join a study group or online forum to discuss course concepts

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Engage with other students to discuss course concepts, ask questions, and share insights. This collaborative learning experience can deepen your understanding and identify areas where you need additional support.

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Join an existing study group or online forum related to the course.
Participate actively in discussions and ask thoughtful questions.
Share your own insights and perspectives with the group.

Volunteer at a non-profit organization focused on financial literacy

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Gain practical experience in applying financial modeling concepts to real-world scenarios while making a positive impact in your community. This volunteering opportunity will enhance your understanding and provide valuable hands-on experience.

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Research non-profit organizations that focus on financial literacy.
Identify volunteer opportunities that align with your interests and skills.
Reach out to the organization to inquire about volunteering.

Write a Blog Post on a Financial Topic

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Share your knowledge of finance by writing a blog post on a financial topic. This will help you to reinforce your understanding of the concepts and to communicate them effectively to others.

Browse courses on Financial Literacy

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Write a blog post
Choose a financial topic
Research the topic

Develop a Business Plan for a New Venture

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Demonstrate your ability to apply the concepts of financial analysis and business planning by developing a business plan.

Browse courses on Business Planning

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Identify a business opportunity
Develop a business model
Create financial projections

Develop a financial model for a proposed business venture

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Apply your knowledge of financial modeling to create a comprehensive model that forecasts the financial performance of a hypothetical business venture, allowing you to assess its viability and make informed decisions.

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Identify a hypothetical business venture to model.
Gather relevant financial data and assumptions.
Build a financial model in Excel or other financial modeling software.
Analyze the results of the model and draw conclusions about the venture's financial feasibility.

Analyze a Real-World Investment Opportunity

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Put your skills to the test by analyzing a real-world investment opportunity. This will give you practical experience in applying the concepts of financial analysis and decision-making.

Browse courses on Investment Analysis

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Identify an investment opportunity
Analyze the financial statements
Evaluate the investment opportunity using NPV and IRR

Career center

Learners who complete Decision-Making and Scenarios will develop knowledge and skills that may be useful to these careers:

Financial Analyst

Financial Analysts apply their understanding of financial markets and data to analyze a company's or individual's financial health. This course can be particularly valuable, as it helps build a foundation in analyzing financial data to make sound investment decisions. By mastering the techniques taught in this course, you will be able to assess the risks and returns of investments more effectively, thus contributing to more profitable outcomes for your clients or organization.

See salaries and explore the career path for Financial Analyst

Investment Banker

Investment Bankers provide financial advice to corporations and governments, helping them raise capital and make strategic decisions. This course can be highly beneficial as it offers tools and techniques to evaluate investment projects and make sound financial decisions. Leveraging the knowledge gained from this course, you'll be able to better assess the viability of investment opportunities and provide more informed advice to your clients.

See salaries and explore the career path for Investment Banker

Portfolio Manager

Portfolio Managers make investment decisions for individuals and institutions, managing their financial portfolios. This course can be a valuable asset, providing you with the skills to evaluate investment opportunities, allocate assets, and manage risk. By applying the principles taught in this course, you can enhance your ability to build and manage successful investment portfolios for your clients.

See salaries and explore the career path for Portfolio Manager

Financial Planner

Financial Planners help individuals and families manage their financial resources and plan for the future. This course can be beneficial as it provides a framework for evaluating financial scenarios and making informed decisions. By mastering the concepts covered in this course, you'll be able to better assist your clients in achieving their financial goals.

See salaries and explore the career path for Financial Planner

Risk Manager

Risk Managers identify, analyze, and mitigate potential risks for businesses and organizations. This course can be valuable as it provides techniques to assess and manage financial risks. By applying the knowledge gained from this course, you'll be better equipped to develop and implement effective risk management strategies, enhancing the financial stability of your organization.

See salaries and explore the career path for Risk Manager

Auditor

Auditors examine financial records and ensure compliance with regulations, providing assurance on the accuracy and reliability of financial information. This course can be beneficial as it offers a foundation in financial analysis and accounting principles. By understanding the techniques taught in this course, you'll be better able to evaluate financial statements, detect irregularities, and ensure the integrity of financial reporting.

See salaries and explore the career path for Auditor

Consultant

Consultants provide expert advice to businesses and organizations on various aspects of their operations, including financial management. This course can be helpful as it equips you with analytical skills and problem-solving techniques. By leveraging the knowledge gained from this course, you'll be better able to analyze business scenarios, identify areas for improvement, and develop data-driven recommendations for your clients.

See salaries and explore the career path for Consultant

Data Analyst

Data Analysts collect, clean, and analyze data to identify trends and patterns. This course can be a valuable asset as it provides a foundation in data analysis and modeling techniques. By mastering the concepts taught in this course, you'll be able to effectively analyze and interpret data, derive meaningful insights, and contribute to data-driven decision-making within your organization.

See salaries and explore the career path for Data Analyst

Business Analyst

Business Analysts identify and analyze business needs and develop solutions to improve efficiency and performance. This course can be beneficial as it provides a framework for evaluating business scenarios and making data-driven decisions. By understanding the techniques taught in this course, you'll be better equipped to gather and analyze data, identify areas for improvement, and develop effective solutions for your organization.

See salaries and explore the career path for Business Analyst

Project Manager

Project Managers plan, execute, and deliver projects within specified constraints. This course can be helpful as it offers a structured approach to project evaluation and risk management. By applying the knowledge gained from this course, you'll be better able to analyze project scenarios, assess potential risks, and develop effective strategies to ensure successful project outcomes.

See salaries and explore the career path for Project Manager

Actuary

Actuaries use mathematical and statistical techniques to assess and manage financial risks and uncertainties. This course can be a valuable foundation as it provides a strong understanding of financial modeling and risk analysis. By mastering the concepts taught in this course, you'll be better equipped to develop and implement actuarial models, evaluate risk profiles, and make informed decisions in the face of uncertainty.

See salaries and explore the career path for Actuary

Economist

Economists study the production, distribution, and consumption of goods and services. This course can be beneficial as it offers a framework for analyzing economic data and trends. By understanding the principles taught in this course, you'll be better able to interpret economic indicators, forecast economic conditions, and develop informed strategies for businesses and organizations.

See salaries and explore the career path for Economist

Statistician

Statisticians collect, analyze, interpret, and present data. This course can be a valuable foundation as it provides a strong understanding of statistical methods and data analysis techniques. By mastering the concepts taught in this course, you'll be better equipped to design and conduct statistical studies, analyze data, and draw meaningful conclusions from your findings.

See salaries and explore the career path for Statistician

Operations Research Analyst

Operations Research Analysts use mathematical and analytical techniques to improve the efficiency and effectiveness of operations. This course can be beneficial as it offers a foundation in modeling and optimization techniques. By understanding the principles taught in this course, you'll be better able to analyze operational scenarios, identify areas for improvement, and develop data-driven solutions to optimize your organization's performance.

See salaries and explore the career path for Operations Research Analyst

Quantitative Analyst

Quantitative Analysts use mathematical and statistical models to analyze financial data and make investment decisions. This course can be a valuable foundation as it provides a strong understanding of financial modeling and data analysis techniques. By mastering the concepts taught in this course, you'll be better equipped to develop and implement quantitative models, analyze financial data, and make informed investment decisions.

See salaries and explore the career path for Quantitative Analyst

Reading list

We've selected 43 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 Decision-Making and Scenarios.

Corporate Finance, Global Edition

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Provides a comprehensive overview of corporate finance, covering topics such as capital budgeting, capital structure, and dividend policy. It valuable resource for students who want to learn more about the financial decision-making process.

Decision-Making and Scenarios

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What's inside

Syllabus

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Reviews summary

Quantitative business decision making with npv

Activities

Career center

Reading list

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