Capital Budgeting

Code:

1GE308

Acronym:

PI

Keywords
Classification	Keyword
OFICIAL	Management Studies

Instance: 2017/2018 - 2S

Active?	Yes
Responsible unit:	Management
Course/CS Responsible:	Bachelor in Business Administration

Cycles of Study/Courses

Acronym	No. of Students	Study Plan	Curricular Years	Credits UCN	Credits ECTS	Contact hours	Total Time
LGES	166	Bologna Syllabus since 2012	3	-	6	42	162

Teaching language

Portuguese and english

Objectives

The course intends to introduce students to the capital budgeting process and techniques, developing the adequate skills both for valuation and for decision-making. The course addresses not only the main (traditional) valuation techniques, but also the most recent methods for project valuation (real options theory).

Learning outcomes and competences

To develop the skills to adress the capital budgeting, using several valuation techniques.

Working method

Presencial

Program

1. Introduction

2. The Capital Budgeting

3. The Main Criteria for Project Valuation

4. Methods to Approach Risk in Project Valuation

5. The Cost of Capital

6. New Methods for Project Valuation: the Real Options Theory

Mandatory literature

Alan C. Shapiro; Capital Budgeting and Investment Analysis, Prentice Hall, 2004
Ross S.; R. Westereld; J. Jaffe; and B. Jordan ; Modern Financial Management, McGraw Hill , 2008, 9th Ed
Brealey, R.; S. Myers; and F. Allen ; ;Principles of Corporate Finance, McGraw Hill , 2008, 9th Ed

Teaching methods and learning activities

The teaching method includes moments where the main theoretical and conceptual aspects will be presented, (and the main valuation techniques will be discussed), and also moments where concepts and theories will be applied by solving real-world problems and case studies.

Evaluation Type

Distributed evaluation without final exam

Assessment Components

Designation	Weight (%)
Teste	100,00
Total:	100,00

Amount of time allocated to each course unit

Designation	Time (hours)
Estudo autónomo	120,00
Frequência das aulas	42,00
Total:	162,00

Calculation formula of final grade

"Continuous assessment": 2 partial written tests; each test contributes in 50% for the final grade;

Final exam: Written exam 

Classification improvement

The students can improve the grade by doing an global exam.