Project Analysis

Code:

EM504

Acronym:

API

Instance: 2003/2004 - 2S

Active?	Yes
Responsible unit:	Industrial Management and Engineering Section
Institution Responsible:	Faculty of Engineering

Cycles of Study/Courses

Acronym	No. of Students	Study Plan	Curricular Years	Credits UCN	Credits ECTS	Contact hours	Total Time
LEM	27	Plano de Estudos EM Oficial a partir de 2000	5	3	5	-
		Plano para Bachareis EM a partir 2000	2	3	5	-

Teaching language

Portuguese

Objectives

It is the aim of this subject to teach students how to take Capital Budgeting decisions. The emphasis throughout the course is on the practical application of the methodologies of project appraisal both with and without risk and uncertainty.

Program

Part I – Project Appraisal

- Fundamental concepts
- An overview of the Capital Budgeting process.
- Cash flow analysis
- Measures of Investment worth
- The cost of capital
- Project appraisal under inflation

Part II – Applications

- Projects with unequal lives
- Capital rationing
- Equipment replacement Decisions.
- Other applications

Part III- Risk and uncertainty
- Subjective methods
- Game theory methods
- Sensitivity and scenario analysis
- Monte Carlo Simulation
- Decision trees analysis
- The CAPM approach
- The real options approach.

Main Bibliography

"Notas de Apoio - Análise de Projectos de Investimento" de M.D.S.Lopes.
_- Text and Slides written by the Lecturer
- "Avaliação de Projectos de Investimento na Óptica Empresarial", J.O. Soares, A.V. Fernandes, A.A. Março, J.P.. Marques, Edições Silabo, Setembro 1999.ou,
- "Decisões de Investimento e financiamento de projectos" de Carlos Barros, Edições Silabo, 2000.

Complementary Bibliography

" Capital Investment and Financial Decisions" Levy e Sarnat, Prentice -Hall, 1994.

"The Capital Budgeting Decision", Bierman e Smidt, Collier Mc Millan,1993

Teaching methods and learning activities

The course consists of lectures followed by tutorials with discussion and analysis of applications and cases. Throughout the course the students (in teams of 2/3 students) are invited to an in-depth evaluation of a ( real) project. At the end they will submit a written report on the case and will present it orally to the rest of the class.

Evaluation Type

Evaluation with final exam