PFEFI Efectiveness of investment

Faculty of Economics and Administration
Spring 2009
Extent and Intensity
1/2. 4 credit(s). Type of Completion: zk (examination).
Teacher(s)
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. Zuzana Kotherová, Ph.D.
Timetable
Mon 11:05–11:50 S402
  • Timetable of Seminar Groups:
PFEFI/1: 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 treats models of assessment of investment efficiency in public administration. Presented models are based on investment performance as well as its costs. These models are applicable in manufacturing companies, financial institutions (banks, insurance companies, etc.), state authorities or public administration councils. Within the selection of the presented methods a special attention is paid to the ones used by the banking sector (not only in the Czech Republic) when making a decision on the allocation of credits. The course looks in detail at the theory of project financing as well. It gives an overview of techniques that are used by budget-driven companies. The course will equip students with practical knowledge applicable in public administration management.


The course participants will have:

- representative theoretic knowledge necessary to assess investment efficiency. They will be able to apply the knowledge in practice, especially in the following areas: a) financial management of public administration projects, b) financial management of public administration institutions, c) 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 – Average 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 – average 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 evaluation 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) average 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) average 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
  • VALACH, Josef. Investiční rozhodování a dlouhodobé financování. 2. přeprac. vyd. Praha: Ekopress, 2006, 465 s. ISBN 8086929019. info
  • KALOUDA, František. Základy firemních financí. 1. vyd. Brno: Masarykova univerzita, 2006, 171 s. ISBN 8021041064. info
  • MENŠÍK, Josef and František KALOUDA. Základy firemních financí, cvičebnice (Introductory Corporate Finance, exercise book). 1st ed. Brno: Masarykova univerzita, Ekonomicko-správní fakulta, 2005, 64 pp. ISBN 80-210-3872-1. info
  • BREALEY, Richard A. and Stewart C. MYERS. Teorie a praxe firemních financí. Translated by Zdeněk Strnad - Vilém Jungmann - Tomáš Hlaváč. Vyd. 1. Praha: Computer Press, 2000, xix, 1064. ISBN 8072261894. info
  • VALACH, Josef. Finanční řízení podniku. 2. aktualizované a rozší. Praha: Ekopress, 1998, 324 s. ISBN 8086119211. info
Assessment methods
The course finishes with an exam (written and oral). Students may take the final exam after the following requirements have been met: passing at least two out of three tests; case study presentation. Students of the combined study form will have to hand over 3 additional seminar papers based on self-study.
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 2010, Spring 2011, Spring 2012.
  • Enrolment Statistics (Spring 2009, recent)
  • Permalink: https://is.muni.cz/course/econ/spring2009/PFEFI