PROJECT EVALUATION

In this course project risks will also be discussed. A simulation analysis will also be introduced in this course.
Project is selected if the benefit is greater than the investment. The problem arises because the benefit and the investment occur at different times. We need to find some evaluation criteria to incorporate this problem when we are evaluating projects. In this course exhaustive methods of evaluating projects will be discussed. Not only cash flows occur at different times, they also bear some risks. There are economic risks such as inflation, or business risks such as market downturn, etc. In this course project risks will also be discussed. A simulation analysis will also be introduced in this course.

1. Know various project evaluation techniques
2. Know how to determine hurdle rate and discount rate
3. Know how to evaluate projects
4. Know how to deal with Project Risks
5. Know how to use Excel in evaluating projects
6. Know how to simulate project using Monte Carlo Simulation

1. Cash Flow in Project Evaluation
2. The Effect of Inflation in Cash Flow
3. Depreciation, Depletion and Amortization in Cash Flow
4. Time value of Money
5. The Hurdle Rate
6. The Cost of Capital (Weighted Average of Cost of Capital)
7. The Discount Rate and Discount Factor
8. The Future Value
9. The Present Value
10. Project Financial Risks
11. The Concept of Probability
12. The Preference of Risks
13. Decision Tree Analysis
14. Using Tree plan Software in Decision Tree Analysis
15. Utility Theory in Risk Preference
16. Risk Taker vs Risk Averse
17. Project Evaluation Criteria:
1. Payback Period (Pay Out Time)
2. Discounted Payback Period
3. Discounted Profit to Investment Ratio
4. Net Income to Investment Ratio
5. Net Present Value (NPV)
6. Discounted Cash Flow Rate of Return (Internal Rate of Return, IRR)
7. Present Value Profile
8. Growth Rate of Return (GRR)
9. Project Ranking and Selection
18. Monte Carlo Simulation in Project Evaluation