Course Tutors
Course Outline
Week 1 : General Information on Investment
- The Concept of Investment and the Investment Plan
- The Importance of Investment in Economic Growth
- Investment categories
- The Multidimensional Character of Investment
- Why are Feasibility Studies needed?
Week 2 : Savings and Economic Growth
- Savings as a Determinant of Economic Growth
- The Role of Financial Markets in the Convertibility of Savings into Investments
- Credit Policy and Economic Development
Week 3 Investment Cycle and Feasibility Study Structure
- Prefeasibility study
- Feasibility study
- The Structure of a Feasibility Study
- Feasibility Study versus Business Plan
- Stages of Business Plan Development and Business Plan Structure
Week 4 : Value of Money in Time
- Future Value (Simple Interest, Compound Interest – Compounding Frequency, Annual Effective Rate)
- Present Value
- Payment series – Annuities (Future Value of Overdue Annuity, Present Value of Overdue Annuity, Present Value of Annuity in Perpetuity)
Week 5 : Bank Financing in the Real Estate Market
- Loan interest rate
- Insurance of the lending institution
- Currency of the loan
- How to repay the loan
- Analysis of the borrower’s creditworthiness.
Week 6 : Estimating the cash flow of an investment
- Calculation of Initial Investment Cost
- Operating Cash Flow
- Estimation of Revenue from Sales
- Estimation of Operating Costs
- Dealing with Depreciation
- Addressing Residual Value
- Estimation of Working Capital
- Determination of Change in Taxes
- Ignoring the Interest
- Final assessment
- Net Cash Flow
- Case studies
Week 7 : Determination of the Discount Factor
- Sources of funding
- Cost of Capital
- Cost of the Components of the Capital Structure
- Asset Valuation Template
- Dividend Discount Template
- Risk reward model
Week 8 : Investment appraisal
- Average Annual Return
- Period for repayment or recovery of the investment
- Discounted Period of Recovery of Investment
- Net Present Value
- Profitability Index
- Internal Rate of Return
- Comparison of the Net Present Value and Internal Rate of Return methods
- Modified Internal Rate of Return
Week 9 : Property Valuation Methods
- Income Method or Income Capitalisation Method or Investment or earnings Method:
- Discount Cash Flows technique and
- Technique of Direct Capitalization
- Comparative Method
- Residual method
- Method of determining the objective value
- Practical applications of real estate valuation methods using EXCEL Spreadsheets
Week 10 Real Estate Investment Evaluation Methods
- Evaluation of real estate investments using the Net Present Value method
- Evaluation of real estate investments with the Profitability Index
- Evaluation of real estate investments using the Internal Rate of Return method
- Practical applications of real estate investment appraisal methods using EXCEL Spreadsheets
Week 11 : Sensitivity and Risk Analysis
- Risk measures
- Methods of Risk Inclusion in the Capital Investment Budget:
- Risk – Adjusted Return Method
- Certainty Equivalent Approach
- Scenario Analysis
- Sensitivity Analysis
- Decision trees