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EM 504 -
Investment Project
and Analysis (Análise de
Projectos de Investimento) Part I – Project Appraisal - Fundamental concepts - An overview of the Capital Budgeting process. - Cash flow analysis - Measures of Investment worth - The cost of capital - Project appraisal under inflation Part II – Applications - Projects with unequal lives - Capital rationing - Equipment replacement Decisions. - Other applications Part III- Risk and uncertainty - Subjective methods - Game theory methods - Sensitivity and scenario analysis - Monte Carlo Simulation - Decision trees analysis - The CAPM approach - The real options approach. Objectives It is the aim of this subject to teach students how to take Capital Budgeting decisions. The emphasis throughout the course is on the practical application of the methodologies of project appraisal both with and without risk and uncertainty. |