How do managers make decisions on WHETHER, WHEN and HOW to invest and spend money on projects? What will be the profits and the creation of value?
11 basic principles you need to know about project appraisals (CAPEX)
- Project appraisals is the study and decision-making process on all types of projects (business cases and proposals) in the company to ensure its growth and profit.
- The techniques allow for the calculation of the net present value (NPV) created for the company by doing the project, the internal rate of return (IRR) and the payback of the project.
- All the above techniques must be considered together to make the most optimal decision.
- The technique allows to bring together the experts within the company and decide on projects.
- It highlights the qualitative and quantitative benefits of each project and which projects should be implemented.
- It demonstrates that the techniques are completely different from the standard budgeting techniques as it considers the time value of money.
- Each project must reach at least the cost of capital to be valuable.
- The cost of capital (WACC) and IRR are the benchmarks within the company to make financial and strategic decisions.
- The risk associated with the project can be eliminated by adjusting the cost of capital.
- That project appraisals are the decision instrument for the CEO, CFO and management teams to decide, select and approve projects.
- That every manager or professional who participates in business decisions, must have the necessary knowledge to participate constructively in these crucial management decisions.
The course and the learning outcome
Whether you are a manager evaluating/deciding on projects or you are in charge of developing project plans, the course teaches you the crucial role which a project appraisal plays in financial decision making and brings you the tools and techniques on how to analyse and forecast the economic viability of your project.
The 2 days are dedicated to develop the skills to evaluate, calculate the viability and decide on new projects, by learning:
- The rationale behind project appraisals.
- Understand the capital expenditure decision-making process.
- Learn the business case for capital expenditure investments.
- Get to grips with project management principles.
- Capital budgeting techniques and the capital expenditure framework.
- Learn techniques such as the Net Present Value (NPV), the internal rate of return (IRR) and Payback methods for managerial decision making.
- Explore the capital investment decision model and the soft side of project decisions.
- Use sensitivity and scenario analysis to build and decide on alternatives.
- Decide on the discount factor by calculating the firm's cost of capital.
- Explore the complexity of international capital budgeting.
- Evaluate methods of debt and/or equity financing and the impact on the capital structure.
- Understand the importance of reviewing a capital expenditure investment after completion.
You will be equipped with a comprehensive approach on how to evaluate or calculate project outcomes. You will have mastered the latest industry techniques available and feel comfortable defending your project plans to your peers.
This course is designed for all responsible for setting up new projects or the need to evaluate and approve these projects. You could be working for the banking sector, healthcare, retail, construction companies, project contractors, facilities management companies, government and public service offices, public service utilities, commercial banks, project investment funds, project insurance companies, engineering consultants, environmental consultants or development agencies
Course format (Residential and Online)
- Besides the course materials provided on the day, all course resources are available online, including audio and video material from industry experts.
- Practice-based learning and critical engagement is a key theme through all our courses allowing delegates to acquire the needed skills and techniques to be applied as soon as they are learned and developed.