Investment Evaluation Methods

Introduction

In this course, we will delve into the essential tools and techniques for assessing and analyzing investment opportunities. Investment evaluation methods provide a structured framework to determine the viability, profitability, and risks associated with potential investments. Understanding these methods is crucial for individuals and organizations looking to make informed financial decisions, allocate resources wisely, and optimize returns on investments.

Course Objectives

• Develop a comprehensive understanding of various investment evaluation methods.
• Learn how to assess and compare investment opportunities effectively.
• Identify key financial metrics and indicators for investment decision-making.
• Gain proficiency in risk assessment and mitigation strategies.
• Equip participants with the skills to make sound investment choices.

Course Outlines

Day 1
Fundamentals of Investment Evaluation

• Introduction to Investment Evaluation and Its Significance.
• Time Value of Money (TVM) Concepts: Present Value and Future Value.
• Net Present Value (NPV) Analysis: Assessing Project Profitability.
• Internal Rate of Return (IRR): Understanding the Rate of Return.
• Practical Exercises: Calculating NPV and IRR.

Day 2
Risk Assessment and Management

• Risk in Investment: Types and Sources.
• Risk vs. Reward Trade-off.
• Sensitivity Analysis: Evaluating Impact of Variables.
• Monte Carlo Simulation: Managing Uncertainty.
• Case Studies: Analyzing Risk in Real-World Investments.

Day 3
Financial Metrics and Ratios

• Return on Investment (ROI) Calculation.
• Payback Period Analysis: Determining Investment Recovery.
• Profitability Index (PI) and Modified Internal Rate of Return (MIRR).
• Cost of Capital: Evaluating Capital Structure.
• Workshop: Calculating Financial Metrics.

Day 4
Investment Appraisal Techniques

• Capital Budgeting: Selecting Optimal Projects.
• Real Options Analysis: Incorporating Flexibility in Decision-Making.
• Comparing Different Investment Proposals.
• Ethical Considerations in Investment Evaluation.
• Group Discussions: Ethical Dilemmas in Investment Decision-Making.

Day 5
Case Analysis and Practical Application

• Analyzing Investment Case Studies.
• Portfolio Diversification and Risk Reduction.
• Constructing Investment Reports and Proposals.
• Investment Strategies for Different Sectors.