Mastery in investment appraisal techniques

You will learn everything you need to know in investment appraisal fundamentals. As an investor, your perspectives on investment alternatives will radically change after completing this course. You will be able to choose the best projects for your precious funds. As a student, you will get to know all the basic investment appraisal techniques which could appear in your exams. I can assure you that this course will give you the maximum return for your investment on this programme by making you the master in investment appraisal techniques.

At the completion of this course, you will be a master in following investment appraisal techniques.

1. Traditional Payback Period

2. Accounting Rate of Return / Average Rate of Return (ARR)

3. Net Present Value (NPV)

4. Internal Rate of Return (IRR)

5. Discounted Payback Period

In addition to these techniques, you will learn how to incorporate the following aspects in investment appraisals.

1. Annuity and Perpetuity

2. Non-annual cashflows

3. Capital rationing and Profitability Index (PI)

4. Non-financial factors

Designed to make you an expert

You will get concept explanation animation videos, theory explanation handouts, question sets, answer keys and answer explanation videos for each topic. There are more than 70 practice questions with answer explanation. All the theory explanation handouts, question sets and answer keys have been given in a downloadable format to make sure you get maximum out of it.

If you want to be a master in investment appraisal techniques, you should follow the following steps.

Step 01: Watch the concept explanation video

Step 02: Read the theory explanation handout

Step 03: Try the relevant question set

Step 04: If you feel comfortable with the questions, check your answers with the recommended answers. If not, go back and watch the video again.

Step 05: Watch the answer explanation video to consolidate your knowledge (answer explanation videos have been given for the selected challenging questions only)

Bonus step: Watch the videos explaining the application of Excel formulae to calculate NPV and IRR.

What you will get in each section

Section 01: Introduction to the course

• The structure of the course is explained with few ground rules to follow.

Section 02: Introduction to investment appraisal

• Importance of investment appraisal

• Classification of investment appraisal techniques

Section 03: Payback period

• Importance of the traditional payback period

• How to calculate the payback period

• How to calculate the payback period when you have many investments in different years

• Pros and cons of payback period method

Section 04: Average Rate of Return / Accounting Rate of Return (ARR)

• Key equations to calculate the ARR
  How to calculate ARR

• Pros and cons of the ARR technique

Section 05: Time value of money

• Why money has a time value

• The logic behind calculating the present value from the future value

• The meaning of cost of capital / discount rate

• How to tackle the deferred and advanced cashflows

Section 06: Net Present Value (NPV)

• How to calculate NPV using the formula

• How to calculate NPV using the present value table

• Pros and cons of NPV method

Section 07: Annuity and Perpetuity

• The concept of annuity

• How to use annuity techniques in NPV calculation

• Annuity techniques for the advanced and deferred cashflows

• Annuity techniques for the constant cashflows in the middle of a project

• How to use perpetuity in NPV calculation

• Perpetuity techniques for advanced and deferred cashflows

Section 08: NPV with non-annual cashflows

• How to convert the annual cost of capital to a non-annual period

• How to incorporate monthly, quarterly and bi-annum cashflows in NPV calculations

• How to apply annuity techniques for non-annual cashflows

Section 09: A comprehensive NPV calculation

• An NPV calculation with non-annual cashflows, annuity techniques and irrelevant cost

Section 10: Internal Rate of Return (IRR)

• Simplified explanation on the concept of IRR

• How to calculate IRR

• Pros and cons of the IRR technique

Section 11: Discounted Payback Period

• How to calculate discounted payback period

Section 12: Capital Rationing and Profitability Index (PI)

• The concept of capital rationing and the underlying assumptions

• Calculating the PI and ranking the projects according to the PI

• How to allocated the limited funds among different projects

Section 13: Calculating NPV and IRR using the Excel formulae

• How to calculate NPV using the inbuilt Excel formula

• How to calculate IRR using the inbuilt Excel formula

Section 14: Non-financial factors in investment appraisal

• The non-financial factors which could affect our investment decisions

• The importance of considering the non-financial factors when making investment decisions

Who this course is for:

• Students who follow professional courses such as CIMA, ACCA or AAT.
• Undergraduates or postgraduates who need to learn investment appraisal techniques.
• Professionals from non-financial backgrounds
• Novice investors