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Financial and Project Analysis 2017/2018

  • 6 ECTS
  • Taught in Portuguese
  • Both continuous and final Assessment

Objectives

At the end of UC students should be able to describe all the steps necessary to build a Project Investment and evaluate it financially through the use of traditional indicators of profitability and still do sensitivity analysis and project risk.

Recommended Prerequisites

Understanding General Accounting

Teaching Metodology

- Lectures
- Interrogative and demonstrative methodologies
- Practical Exercises resolution

Body of Work

1 - Background and Basics
1.1 - Concept project and the decision to invest
1.2 - Types of Investment Projects
1.3 - Development stages of an investment project
1.4 - errors often committed
1.5 - Basic concepts of Financial Evaluation
1.5.1 Cash - Flow
1.5.2 Current - Value
1.5.3 Capital invested and finaciamento project
1.5.4 -Depreciation
1.5.5 - Financial Charges
1.5.6 Residual Value -
1.5.7 Constant prices - vs Current Prices
1.6 - Financing of Projects
1.7 - The cost of capital
1.8 - financial metrics for evaluating projects
1.8.1 - Net Present Value
1.8.2 - Internal Rate of Return
1.8.3 Comparison between the NPV and the IRR
1.8.4 - Profitability Index
1.8.5 Period - Recovery Investimentio or " payback period "

2 - Sensitivity Analyses and Risk
2.1 Sensitivity Analysis
2.2 - Analysis of scenarios
2.3 - Decision Trees
2.4 - Simulation Monte- Carlo

Recommended Bibliography

- Soares, I., Moreira, J., Pinho, C., Couto, J.(2015), Decisões de Investimento-Análise Financeira de Projectos, Edições Sílabo;
- Kurowski, L.; Sussman, D. (2011), Investment Project Design: A Guide to Financial and Economic Analysis with Constraints
- Miguel, A. (2006), Avaliação de Projectos, Construção do Business Case, FCA.
N.A.

Complementary Bibliography

- Soares, J.O., Fernandes, A.V., Março, A.A., Marques, J.P. (1999), Avaliação de Projectos de Investimento na Óptica Empresarial, Edições Sílabo.

Weekly Planning

week Contents
1 Introduction
2
Theoretical Framework / Basic Concepts
3 Phases of development of an investment project
Errors often committed

4 Basic concepts of evaluation Financeiros
Cash Flow
Current Value

5 Capital invested and finaciamento project
Depreciation
Financial Charges
6 Residual Value
Constant prices vs Current Prices
7 The cost of capital The cost of debt capital

8 The cost of equity

9 Financial Metrics for evaluating projects
Net Present Value (NPV)

10 Internal Rate of Return (IRR)
Comparison of the NPV and the IRR

11 Profitability Index (PI or ROI)
Recovery Period of Investimentio or "payback period" (PRIA)



12 Sensitivity Analyses and Risk
Sensitivity analysis

13 Scenario analysis

14 Decision Trees
Monte-Carlo simulation

15 Reviews

Demonstration of the syllabus coherence with the curricular unit's objectives

Points 1 to 1.4, will allow students to describe all the steps of an Investment Project.Points 1.5 to 1.8 will supply the tools to evaluate it financially; finaly with point 2 students will be able to evaluate the risc and sensibility of the project.

Demonstration of the teaching methodologies coherence with the curricular unit's objectives

Theoretical explanations of the contents programmed followed by resolutions of practical exercises allow students to have examples of resolution and establish the reasoning required for other examples below.

relevant generic skillimproved?assessed?
Achieving practical application of theoretical knowledgeYesYes
Adapting to new situationsYesYes
Analytical and synthetic skillsYesYes
Balanced decision makingYesYes
Event organization, planning and managementYesYes
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