Financial Management
Capital Budgeting
NPV, IRR, Payback Period, and Project Evaluation Methods
3 CPD credits on completion
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Certificate on completion
Downloadable resources
Self-paced learning
About This Course
Course Information
Capital Budgeting is all about identifying and evaluating capital projects, i.e. projects with a life of a year or longer. There are four steps to the capital budgeting process: Generate ideas Analyse proposals Create a capital budget Monitoring and post audit
Certificate on Completion
This course is made up of videos, questions and additional reading materials, and accounts for 3 units of CPD. One unit is the equivalent of one hour of learning.
Course Sections
This course is made up of the following sections:
- Process and principles (video)
- Process and principles (quiz)
- NPV, IRR, Payback and PI (video)
- NPV, IRR, Payback and PI (quiz)
What You Will Learn
- Describe the four steps of the capital budgeting process, from idea generation through monitoring and post-audit
- Distinguish between replacement, expansion, new product, and mandatory capital projects
- Calculate net present value, internal rate of return, payback period, discounted payback period, and profitability index for a single project
- Identify the role of sunk costs, opportunity costs, incremental cash flows, and externalities in project evaluation
- Evaluate when NPV and IRR rankings conflict and explain why NPV is generally preferred
- Apply capital rationing concepts when a business has limited funding for multiple profitable projects
Who This Course Is For
- Finance professionals responsible for evaluating or recommending capital investment decisions
- Accountants who need to build or review investment appraisals for their organisations
- Professionals preparing for CFA Corporate Finance topics on capital budgeting
Prerequisites
- Familiarity with time value of money concepts, including present value and discounting
- Basic proficiency with a financial calculator is helpful for working through the examples
Frequently Asked Questions
Course Details
CPD Credits3
CertificateYes
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Everything included in your subscription:
CPD certificate on completion
Downloadable resources
Self-paced learning
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