PFEFI Efectiveness of investment

Faculty of Economics and Administration
Spring 2012
Extent and Intensity
1/2. 4 credit(s). Type of Completion: zk (examination).
Teacher(s)
Ronan DOARE (lecturer)
Ing. František Kalouda, CSc., MBA (lecturer)
Ing. František Kalouda, CSc., MBA (seminar tutor)
Guaranteed by
Ing. František Kalouda, CSc., MBA
Department of Finance - Faculty of Economics and Administration
Contact Person: Ing. Šárka Horáková
Supplier department: Department of Finance - Faculty of Economics and Administration
Timetable
Mon 11:05–11:50 P104
  • Timetable of Seminar Groups:
PFEFI/01: Mon 12:00–13:35 S402, F. Kalouda
Course Enrolment Limitations
The course is only offered to the students of the study fields the course is directly associated with.

The capacity limit for the course is 30 student(s).
Current registration and enrolment status: enrolled: 0/30, only registered: 0/30
fields of study / plans the course is directly associated with
Course objectives
The course is devoted to the models of the assessment of the investment efficiency in public administration. Presented models are based on both focus on investment performance as well as its costs. These models are applicable to the manufacturing company as well as to the financial institutions (bank, insurance company etc.) and state authority or public administration (council). Within the selection of the presented methods was preffered those normally used by the banking sector (not only in the Czech Republic) in the process of deciding on the allocation of credits. The course is devoted to the theory of project financing as well. The important component of the course is also an overview of techniques that are used in cases of budget-driven companies. Therefore, there is also obvious the practical usefulness of the knowledge for the management processess of public administration. The succesful absolvents of the course will dispose of: 1) Representative theoretic platform for the assessment of the investment efficiency and will be able to apply the knowledge in practise, such as: a) in the financial management of public administration projects b) in the financial management of public administration institutions c) in the financial management of public administration subjects
Syllabus
  • Thematic plan of the course: 1 Financial management and financial decision making. Financial decision making in the short-term and long-term view (and capital planning). Specifics of the investment decision making. 2 Four standard methods I – two static methods (ARR, PB) 3 Four standard methods II – two dynamic methods (NPV, IRR) 4 The sources of investment financing (asset and capital structure). Basic rules of financing. 5 Investment risk. Net working capital (NWC) and financing strategy. Criteria of the financial analysis (bonding capacity and bakruptcy models). 6 Alternative methods of assessment of the investment efficiency I – Avarage rate of Return (ARR). 7 Alternative methods of assessment of the investment efficiency II - Payback Period (PB). 8 Methods of assessment of the investment efficiency based on the costs I – avarage rate of annual costs (ARAC). 9 Methods of assessment of the investment efficiency based on the costs II – discounted costs method (DC). 10 Real option as an instrument of the assessment of the investment efficiency. 11 Project management and project financing. 12 Budget financing I – conventional budget methods (incremental, ZBB, CMP). 13 Budget financing II – new budget methods (PPB, KAIZEN, WCM and contingent approaches). Thematic plan and content of the seminars: 1) Introductory seminar seminar organization conditions of eveluation and completion of the course case studies assignment 2) Static methods (ARR, PB) the principle of the static methods (unrespected time value of the money) ARR method (Average Rate of Return) PB method (Payback) static methods applicability 3) Dynamic methods (NPV, IRR) the principle of the dynamic methods NPV method (Net present Value) IRR method (Internal Rate of Return) comparison of NPV and IRR 4) Test 1 task specification working out discussion of the problems resulted from the test 5) Bonding capacity and bankruptcy models the principle of the bonding capacity and bankruptcy models bonding capacity and bankruptcy model I – Z score model (for public company and limited company) bonding capacity and bankruptcy model II – Quick test (Q-test) bonding capacity and bankruptcy model III – Bonding Capacity indicator (BCI) 6) Alternative methods of assessment of investment efficiency (ARR, PB) avarage rate of return (ARR) payback Period (PB) relation of the alternative methods of the investment efficiency assessment and standard methods 7) Cost-driven methods of the investment efficiency assessment (ARAC, DC) avarage rate of annual costs (ARAC) discounted costs method (DC) relation of the cost-driven methods of the investment efficiency assessment to standard methods 8) Test 2 task specification working out discussion of the problems resulted from the test 9) Case studies presentation II 10) Real option as an instrument of assessment of the investment efficiency description of the real option method advantages of the real option method in comparison with the NPV method and IRR method applicability of the real option methods 11) Budget financing conventional budget methods (incremental, ZBB, CMP) new budget methods (PPB, KAIZEN, WCM and contingent approaches) comparison of the conventional methods with new budget methods 12) Test 3 task specification working out discussion of the problems resulted from the test 13) Case studies presentation III
Literature
    required literature
  • KALOUDA, František. Finanční řízení podniku. 2. rozš. vyd. Plzeň: Vydavatelství a nakladatelství Aleš Čeněk, 2011. 299 s. ISBN 9788073803155. info
  • VALACH, Josef. Finanční řízení podniku. 2. aktualizované a rozší. Praha: Ekopress, 1998. 324 s. ISBN 8086119211. info
    recommended literature
  • VALACH, Josef. Investiční rozhodování a dlouhodobé financování. 2. přeprac. vyd. Praha: Ekopress, 2006. 465 s. ISBN 8086929019. info
  • BREALEY, Richard A. and Stewart C. MYERS. Teorie a praxe firemních financí. Edited by Vilém Jungmann, Translated by Zdeněk Strnad - Tomáš Hlaváč. Vyd. 1. Praha: Computer Press, 2000. xix, 1064. ISBN 8072261894. info
Assessment methods
The course is finished by the exam which is written as well as oral. Qualification for the exam is successfully passed at leat two of three tests and appropriate case study presentation. In case of the combined form of studies there is required three correctly prepared homeworks in addition.
Language of instruction
Czech
Further comments (probably available only in Czech)
Study Materials
General note: Část výuky probíhá ve francouzštině.
The course is also listed under the following terms Spring 2008, Spring 2009, Spring 2010, Spring 2011.
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