HAME508

Making Capital Investment Decisions

Use formal frameworks to evaluate the feasibility of new initiatives. Make sound investment decisions that increase your organization's profitability.

Description

One of the most important aspects of a manager's job is to evaluate the feasibility of new initiatives and to make sound investment decisions. This includes conducting a thorough and reliable analysis using the appropriate financial decision-making tools.

In this course, participants will learn six capital budgeting rules that provide a framework for making sound project investment decisions. Participants will examine how the rules differ from one another, and which rules are most appropriate for different project settings.

Who Should Take This Course?

This course is important for managers, supervisors, and team leaders at any level responsible for project planning, purchasing decisions, capital budgeting projects, and other important initiatives for their organization.

Course Format

eCornell takes a problem-based approach to learning, and our courses are built around realistic case studies and scenarios. All courses are self-paced, and are facilitated by an eCornell instructor, who leads the online discussions and is available to answer any questions about the course content.

This course contains the following modules:

• Conceptual Framework
  • How value is created in a business
  • How capital budgeting rules provide a framework for making project investment decisions
  • Appropriate use of other accounting-based techniques such as return on assets and return on equity
• Basic Capital Budgeting Decision Rules
  • Calculation and appropriate use of net present value (NPV) as a tool in making project investment decisions
  • Internal rate of return (IRR), its strengths, weaknesses, and appropriate use as a decision rule
  • Payback periods (PP), its strengths, weaknesses, and appropriate use as a decision rule
  • Discounted payback periods (DPP), its strengths, weaknesses, and appropriate use as a decision rule
• Special Cases
  • Calculation and appropriate use of profitability index (PI) as a decision rule
  • Calculation and appropriate use of equivalent annual cost (EAC) as a decision rule

Benefits to the Learner

After completing this course, participants will be able to:

• Apply capital budgeting decision rules to make sound financial choices
• Accurately analyze decisions and projects for financial soundness

Authoring Faculty

Steven Carvell, Ph.D., Associate Professor and Associate Dean for Academic Affairs

Scott Gibson, Ph.D., Assistant Professor

Sponsoring School

Cornell University's School of Hotel Administration

Total Learning Time

Approximately five to six hours over a period of two weeks.

Certificate Information

This course can be applied toward the following certificates:

• Business Leadership Skills
• Financial Management

Other Requirements

Participants in this course need one of the following financial calculators:

• Hewlett-Packard 12C
• Texas Instruments BA II Plus

Both are available for purchase directly from Amazon.com.

Prerequisites

This course requires student knowledge of time value of money concepts. If you are unfamiliar with these concepts, we recommend completing Mastering the Time Value of Money (HAME507) prior to enrolling in this course.

ACE CREDIT Recommendation

This course contributes to an eCornell Certificate Program that has been recommended for college credit by the American Council on Education's College Credit Recommendation Service (CREDIT). Please refer to the Certificate information page for additional details.

HRCI Recertification

This course been approved for six (6) Strategic Management recertification credit hours toward SPHR and GPHR recertification and six (6) recertification credit hours toward PHR, SPHR, and GPHR recertification through the Human Resource Certification Institute. Please contact the Human Resource Certificate Institute (HRCI) for further information about certification or recertification.

Project Management Institute Professional Development Units

This course qualifies for 6.75 Professional Development Units (PDUs) from the Project Management Institute (PMI) for Professional Project Managers (PMPs) seeking ongoing education and professional development for continuing certification. eCornell is a Global Registered Education Provider of PMI. PDUs are designated as Category 3.