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Futurum Corfinan : Capital Budgeting Training Class

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This training consists of 2 topics : Fundamentals of Capital Budgeting (2 days) and Capital Budgeting and Valuation of the Project with Leverage (1 Day)

Published in: Economy & Finance
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Futurum Corfinan : Capital Budgeting Training Class

  1. 1. IN-HOUSE TRAINING CLASS Contact : Sukarnen.suwanto@futurumcorfinan.com Basic Class FUNDAMENTALS OF CAPITAL BUDGETING (2 DAYS) Topic Subtopic Forecasting Earnings Revenue and Cost Estimates Incremental Earnings Forecast Indirect Effects on Incremental Earnings Sunk Costs and Incremental Earnings Determining Free Cash Flow and Net Present Value Calculating Free Cash Flow from Earnings Calculating Free Cash Flow Directly Calculating the Net Present Value Choosing Among Alternatives Evaluating Alternatives Further Adjustments to Free Cash Flow Analyzing the Project Break-Even Analysis Sensitivity Analysis Investment Decision Rules NPV and Stand-Alone Projects Applying the NPV Rule The NPV Profile and IRR Alternative Rules vs the NPV Rule The Internal Rate of Return Rule Applying the IRR Rule Pitfall #1 : Delayed Investments Pitfall #2 : Multiple IRRs Pitfall #3 : Nonexistent IRR The Payback Rule Applying the Payback Rule Payback Rule Pitfalls in Practice Choosing Between Projects NPV Rule and Mutually Exclusive Investments IRR Rule and Mutually Exclusive Investments
  2. 2. Intermediate Class CAPITAL BUDGETING AND VALUATION WITH LEVERAGE (1 DAY) www.futurumcorfinan.com The Incremental IRR Project Selection with Resource Constraints Evaluating Projects with Different Resource Requirements Profitability Index Shortcomings of the Profitability Index STUDY CASE Topic Subtopic The Weighted Average Cost of Capital (WACC) Method Using the WACC to Value a Project Implementing a Constant Debt-Equity Ratio The Adjusted Present Value (APV) Method The Unlevered Value of the Project Valuing the Interest Tax Shield The Flow-to-Equity Method Calculating the Free Cash Flow to Equity Valuing the Equity Cash Flows What Counts as “Debt”? Project-Based Costs of Capital Estimating the Unlevered Cost of Capital Project Leverage and the Equity Cost of capital Determining the Incremental Leverage of a Project APV with Other Leverage Policies Constant Interest Coverage Ratio Predetermined Debt Levels A Comparison of Methods Other Effects of Financing Issuing and Other Financing Costs Financial Distress and Agency Costs

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