Description

Provided by PMI® A.T.P. #4760.

All kinds of PMI® certification holders earn 4 PDUs of Strategic and Business Management after taking this course.

This practical training course provides you with the essential knowledge and skills to effectively appraise and analyze projects. It provides you with the latest tools and techniques to manage project risks and uncertainties to ensure profit margins and sustainability in uncertain times.

When taking in this course, you will:

• Undertake, Technical, Economic, Financial & Risk Analysis to select Projects to meet Organisational Objectives
• Undertake Financial Analysis using Payback, NPV & IRR
• Analyze the capital budgeting decision by turning the focus to how the financial manager should prepare cash-flow estimates for use in net present value analysis.

The course information on PMI® CCRS: https://ccrs.pmi.org/search/course/497172

LESSONS:

LESSON 1: ACCOUNTING AND FINANCE
A large corporation is a team effort. All the players—the shareholders, lenders, directors, management, and employees—have a stake in the company’s success and all therefore need to monitor its progress. For this reason, the company prepares regular financial accounts and arranges for an independent firm of auditors to certify that these accounts present a “true and fair view.” Until the mid-nineteenth century, most businesses were owner-managed and seldom required outside capital beyond personal loans to the proprietor. When businesses were small and there were few outside stakeholders in the firm, accounting could be less formal. But with the industrial revolution and the creation of large railroad and canal companies, the shareholders and bankers demanded information that would help them gauge a firm’s financial strength. That was when the accounting profession began to come of age.

LESSON 2: NPV & INVESTMENT CRITERIA
The investment decision, also known as capital budgeting, is central to the success of the company. We have already seen that capital investments sometimes absorb substantial amounts of cash; they also have very long-term consequences. The assets you buy today may determine the business you are in many years hence.

LESSON 3: INVESTMENT DECISIONS
Think of the problems that General Motors faces when considering whether to introduce a new model. How much will we need to invest in new plant and equipment? What will it cost to market and promote the new car? How soon can we get the car into production? What is the projected production cost? What do we need in the way of inventories of raw materials and finished cars? How many cars can we expect to sell each year and at what price? What credit arrangements will we need to give our dealers? How long will the model stay in production? What happens at the end of that time? Can we use the plant and equipment elsewhere in the company? All of these issues affect the level and timing of project cash flows. In this material, we continue our analysis of the capital budgeting decision by turning our focus to how the financial manager should prepare cash-flow estimates for use in net present value analysis.

LESSON 4: PROJECT ANALYSIS
Project evaluation should never be a mechanical exercise in which the financial manager takes a set of cash-flow forecasts and cranks out a net present value. Cash-flow estimates are just that—estimates. Financial managers need to look behind the forecasts to try to understand what makes the project tick and what could go wrong with it. A number of techniques have been developed to help managers identify the key assumptions in their analysis. These techniques involve asking a number of “what-if ” questions. What if your market share turns out to be higher or lower than you forecast? What if interest rates rise during the life of the project?