Valuation of Investment Projects

Capital Budgeting - The Valuation of Projects

In class discussion:

This section trains the student to value individual investment projects; a process commonly referred to as Capital Budgeting. It assumes the student is experienced at time value of money calculations, the basic accounting statements, and cash flow forecasting. The section presents information on the characteristics of financial instruments such as common stocks, preferred stocks, and bonds and trains students in the use of TVM based valuation equations.

Text Readings and Assignments:

Fundamentals of Financial Management, by Eugene F. Brigham & Joel F. Houston, 11th. edition, (Thomsom - South-Western)

ISBN: 0324319800

Student Textbook Website

Assigned Readings: Chapter 11 (pp. 357-379) and Chapter 12 (pp. 387-405)

Component	Chapter Sections:	Pages	Questions	Self Test	Problems
Topics	11.1 - 11.12	357 - 379
Assignments			2,3,4,6,8,9	1,2	1,2,3,4,5,6,7,10,11,12,14,15,16,18
Topics	12.1 - 12.7	387 - 405
Assignments			1,2,3,4,6,7,9	1,2	1,2,3,4,5,6,7,8,9,10

Solutions to assigned Questions and Problems are available in MS WORD format here.

Dr. Constand's Online Readings:

The links below will take you to summaries of the professors' notes and discussions on the topics. You may jump to any one of the web pages directly you can start here and proceed through all the online notes in order. Note that not all of the topics have online notes available.

Capital Budgeting Introduction

Net Investment Worksheet

Operating Cash Flows and Terminal Cash Flows

Project Valuation (not available)

Special Topics and Problems

Risk and Capital Budgeting

Discount Rates and Hurdle Rates (not available)

Quiz (not available)

Other Online Readings and Assignments:

None

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Overview of Entire Module