Capital Budgeting FLEXCAST

Overview

The decision to invest is a continual challenge, requiring insights into a firm’s strategic direction, bottlenecks, cash flows, and expected risks. This course provides clarity by describing the process flow for capital requests. It also covers the primary methods for determining whether a proposed investment is acceptable, as well as a number of strategic and risk-based considerations. Lease or buy financing options are also discussed, along with a system of capital budgeting controls. In short, the course provides the knowledge to assemble and operate a reliable capital budgeting system.

Highlights

Overview of capital budgeting. The capital budgeting application form. Capital budgeting strategy. Risk levels. Discounted cash flow analysis. Cash flows. The tax rate. The cost of capital. Cost of capital derivation. Constraint analysis. Other capital budgeting analyses. The lease or buy decision. Capital budgeting controls.

Prerequisites

None.

Designed For

CPAs, CEOs, CFPs, and other financial managers.

Objectives

Recognize the alterations available for improving an investment proposal, why sunk costs are excluded from proposals, and the alternatives for capital rationing. Identify the market conditions in which different types of investments and investment decisions will be made. Identify the basis for discounted cash flow analysis, and how net present value can be used. Identify the elements of the cost of capital, and note how the cost of capital is calculated. Recognize the derivation of throughput, the best ways to improve financial results, and situations in which local optimization is occurring. Recognize the uses to which payback, real option, and complex environment analysis can be used to review investment proposals. Specify the concepts involved in the lease or buy decision process, and the information to include in or exclude from the decision. Identify the issues to be verified as part of the analysis of a capital budgeting request form.

Preparation

None.

Notice

This is a FlexCast (no exam required) and may be viewed only Monday - Saturday, 5am - 5pm PT. You may take up to one year from the date of purchase to complete the course. Pause your FlexCast and resume at a convenient day during the hours above. Partial credit for 2+ credit courses: If you are unable to complete the course in one sitting, partial credit can be awarded (minimum of one credit). To earn the remaining credits, you must return later and start the course from the beginning. Use chat to ask questions of a subject matter expert during the program.