Investment Project Analysis

Code:

EM0062

Acronym:

API

Keywords
Classification	Keyword
OFICIAL	Management

Instance: 2016/2017 - 1S

Active?	Yes
Responsible unit:	Department of Industrial Engineering and Management
Course/CS Responsible:	Master in Mechanical Engineering

Cycles of Study/Courses

Acronym	No. of Students	Study Plan	Curricular Years	Credits UCN	Credits ECTS	Contact hours	Total Time
MIEM	11	Syllabus since 2006/2007	5	-	6	45,5	162

Teaching language

Portuguese

Objectives

This course unit aims to provide students with knowledge of basic methodologies for the analysis of the financial and economic feasibility of  real investment projects.

Learning outcomes and competences

After the completion of the course unit, students should be capable of making and justifying  real investments decisions   and designing  and analyzing a business plan .

Working method

Presencial

Pre-requirements (prior knowledge) and co-requirements (common knowledge)

Basic concepts of Accounting .

Program

I – Introduction 1- An overview on project analysis.  2- Business plan: description; Basic components of a business plan; Structure. II- Project elaboration and evaluation 3- Feasibility studies; project background: analysis; resource and technical feasibility analysis; market analysis; economic and financial analysis; legal procedures; organizational and human analysis; political, social and environmental analysis. 4- The documents of an economic and financial study; investment plans; operational plan; financing plan. III- Economic and financial evaluation of a project 5- Cash flow (CF) analysis; basic principles of measuring and estimating cash flow; cash flow investment analysis; project side vs. entrepreneur side; cash flow estimation in a situation of inflation. 6- Decision criteria: net present value (NPV); internal rate of return (IRR), profitability index, annuity criteria, and macroeconomic indicators. 7- Project cost of capital; cost of capital; weighted average cost of capital for company: why and how to use it; estimate the cost of financing sources  III- Risk and investment decisions 8- Risk and uncertainty evaluation; basic concepts of risk, risk and uncertainty components; empirical methods in risk management; decision theory; simulation methods- sensitivity analysis, alternative scenarios, breakeven point analysis; Monte Carlo simulation; decision trees; capital asset pricing model (CAPM) – risk management.

Mandatory literature

Maria Dulce Soares Lopes; Elaboração e análise de projetos de investimento. ISBN: 978-972-752-134-0

Complementary Bibliography

Alan C. Shapiro; Capital budgeting and investment analysis. ISBN: 0-13-066090-6

Teaching methods and learning activities

The theoretical part of this course is supported by theoretical type lectures. Theoretical lectures are complemented with case analysis and practical classes, to which experience in the analysis of investments from the team work will be made part.

Evaluation Type

Distributed evaluation with final exam

Assessment Components

Designation	Weight (%)
Defesa pública de dissertação, de relatório de projeto ou estágio, ou de tese	20,00
Exame	50,00
Trabalho escrito	30,00
Total:	100,00

Amount of time allocated to each course unit

Designation	Time (hours)
Elaboração de projeto	53,00
Estudo autónomo	67,00
Frequência das aulas	42,00
Total:	162,00

Eligibility for exams

According to General Evaluation Rules of FEUP

Calculation formula of final grade

Assessment comprises : 1- An  exam and the elaboration and discussion of a group assignment. They will be graded as follows: Assignment 50%; Final exam 50%, with minimum mark of 7(out of 20);FC = 0.5 x FEC + 0.5 x GAC; in which: FC = Final Classification FEC = Final exam classification GAC = Group assignment classification Note: 1- Students who reach a higher mark than 18 out of 20 in the final exam, will have to attend an oral exam. If they do not attend the oral exam, they will earn an 18 out of 20. 2- Students who reach four more values in the group assignment than in the final exam, will be graded as follows: FEC + 4values

Examinations or Special Assignments

Group Assignment- Business Plan - Groups of 4/5 students to be defined at the beginning of the semester - 2 reports have to be written (one at the middle of the semester and another at the end) - Oral presentation - Discussion (to be scheduled with each group). 

Special assessment (TE, DA, ...)

An exam at the corresponding season. Students who reach a higher mark than 18 out of 20 in the final exam, will have to attend an oral exam. If they do not attend the oral exam, they will earn an 18 out of 20.

Classification improvement

An exam (weighting 100% ). The mark of group assignment, will not be taken into account at  this stage. Students who reach a higher mark than 18 out of 20 in the final exam, will have to attend an oral exam. If they do not attend the oral exam, they will earn an 18 out of 20.