Risk and Return: How to Identify, Measure, and Incorporate Into Capital Budgeting Decisions

COURSE ID: HAME509

Course Overview

Every financial decision a firm makes is a balancing act between risk and return. Funded projects can return significant revenue to the company. The risk is that the cost of the project may exceed the return, especially when the need to compensate capital providers is factored in. Being able to accurately assess both the risk and potential return of capital budgeting projects is an important part of your role as a manager.

Your work in this course will include learning how to calculate the hurdle rate, which is the minimum value a project must return, and then how to forecast the expected return. You will get to know the different asset classes and how to think about them in terms of the associated risks.

The tools from this course will help you measure risk and calculate the weighted average of the required returns as a way to ensure that your company chooses the right capital projects.

 

Project Management Institute (PMI®) Continuing Certification: Participants who successfully complete this course will receive 3.5 Professional Development Units (PDUs) from PMI®. Please contact PMI® for details about professional project management certification or recertification.

 

Non-financial managers who will participate in conversations about spending and budget allocation who need to understand how risk and return affect internal financial management decisions.