Capital Budgeting Essentials Curriculum Outline
Capital Budgeting: The Capital Budgeting Process
Overview/DescriptionOrganizations everywhere must decide how to most efficiently spend their capital to continue operations, innovate, and grow. Capital budgeting is a systematic process used to determine how capital – a limited resource – is best allocated to projects that maximize the value of the organization. The projects chosen must align with the organizations greater strategy. This course demonstrates the value of following the capital budgeting process and introduces the three stages in that process: project identification and screening, quantitative assessment, and capital allocation and rationing. The course then focuses on the first stage, exploring how to identify opportunities for capital investment, and subject these initial ideas to preliminary screening based on their feasibility, alignment with organizational strategy, and dependence on other projects.
Target AudienceFinance and nonfinance professionals, functional managers, executives, and all individuals in key roles involved directly or indirectly with the capital budgetary planning and process in an organization
Expected Duration (hours)1.0
Lesson Objectives Capital Budgeting: The Capital Budgeting Process
Describe capital budgeting Associate capital budgeting activities with the stages of the process in which theyre performed Describe the relationship between organizational strategy and capital investment opportunities Recognize appropriate sources and suggestions for capital budgeting opportunities Perform key steps to screen project ideas Course Number:
fin_07_a01_bs_enus Back to ListCapital Budgeting: Net Present Value and Internal Rate of Return
Overview/DescriptionOrganizations rely heavily on quantitative tools such as net present value (NPV) and internal rate of return (IRR) measures to assess which projects to undertake through the capital budgeting process. These tools are based on the time value of money concept, which enables you to calculate the present value of expected project returns and compare projects based on their present value. The course explains the time value of money concept, and shows how to determine net present value and internal rate of return for projects. It explores the strengths and limitations of each of these methods for making decisions, and demonstrates how to use their decision rules to determine which capital investment projects will add the most value to your organization.
Target AudienceFinance and nonfinance professionals, functional managers, executives, and all individuals in key roles involved directly or indirectly with the capital budgetary planning and process in an organization
Expected Duration (hours)1.0
Lesson Objectives Capital Budgeting: Net Present Value and Internal Rate of Return
Recognize the value of quantitative assessment techniques Describe the time value of money Calculate net present value (NPV) for a project Interpret NPV under various project circumstances using the NPV decision rules Apply the IRR decision rule Use NPV and IRR to assess potential projects Course Number:
fin_07_a02_bs_enus Back to ListCapital Budgeting: Discounted Payback Period and Profitability Index
Overview/DescriptionWhen it comes to deciding which new projects to invest in, organizations rely on quantitative tools to objectively compare different proposals. Using measures such as profitability index (PI) and discounted payback period (DPBP), decision makers assess which projects to undertake – the ones that will maximize the value of the organization. These tools account for changes in the value of future cash flows due to the time value of money. This course presents two tools commonly used in the capital budgeting process, profitability index and discounted payback period, and demonstrates how to calculate each. It explores the strengths and limitations of these tools, and describes how organizations use them to guide their investment decisions.
Target AudienceFinance and nonfinance professionals, functional managers, executives, and all individuals in key roles involved directly or indirectly with the capital budgetary planning and process in an organization
Expected Duration (hours)1.0
Lesson Objectives Capital Budgeting: Discounted Payback Period and Profitability Index
Recognize the benefit of considering the time value of money when quantitatively assessing capital projects Perform a preliminary screening of a capital budgeting project based on the discounted payback period (DPBP) Distinguish between strengths and limitations of the DPBP method Calculate profitability index (PI) and use it to make a capital budgeting decision Distinguish between NPV and PI in terms of their strengths and limitations Determine which quantitative method or methods will be most useful for making capital budgeting decisions in a given scenario Course Number:
fin_07_a03_bs_enus Back to ListCapital Budgeting: Capital Allocation
Overview/DescriptionNo organization can claim to have an infinite amount of capital for funding projects. Capital rationing is a fact of organizational life that often requires decision makers to make difficult choices between promising investments. In deciding which projects to accept or reject, an organization must not only perform a quantitative assessment to choose the most profitable projects, but also assess a variety of qualitative factors to analyze the impact and feasibility of each project. Quantitative assessment leads to sound capital allocation based on projected cash flows, while qualitative assessment adds an element of risk management, relying on the experience and knowledge of those familiar with the business. Once capital is allocated and projects are implemented, its important to continue to monitor the projects progress. A post-implementation audit is an important follow-up, used to detect any deviations from the forecasted results and to gain experience that can be used in making future capital budgeting decisions. The course introduces the process of allocating capital based on qualitative assessment factors, and incorporating other qualitative factors – such as the priority of projects – into the allocation of decisions. It also briefly covers project monitoring and post-implementation auditing.
Target AudienceFinance and nonfinance professionals, functional managers, executives, and all individuals in key roles involved directly or indirectly with the capital budgetary planning and process in an organization
Expected Duration (hours)1.0
Lesson Objectives Capital Budgeting: Capital Allocation
Describe capital allocation Describe common quantitative measures used in capital allocation decisions Recognize how qualitative factors can influence capital budgeting decisions Rank projects based on qualitative factors Allocate capital based on quantitative information about projects Describe the benefits of post-implementation auditing Course Number:
fin_07_a04_bs_enus Back to List
Capital Budgeting Essentials
This self-paced online course examines the decisions that every organization must consider, the most effective way to
spend their capital to continue operations, innovate, and grow. Capital budgeting is a systematic process used to determine
how capital – a limited resource – is allocated to projects that maximize the value of the organization.
When it comes to deciding which new projects to invest in, organizations rely on quantitative tools such as net
present value (NPV), internal rate of return (IRR), profitability index (PI), and discounted payback period (DPBP)
measures to assess which projects to undertake through the capital budgeting process. No organization can claim to
have an infinite amount of capital for funding projects. Capital rationing is a fact of organizational life,
requiring decision makers to make difficult choices between promising investments. When deciding which projects to
accept, an organization must not only perform a quantitative assessment to choose the most profitable projects, but
also assess a variety of qualitative factors to analyze the impact and feasibility of each project.
CBT Direct’s Online Capital Budgeting Essentials Training, provides a basic knowledge of the capital budgeting
world and the particulars behind it. This includes sound capital allocation based on projected cash flow and
post-implementation auditing. After taking our online course, the learner should have a better basis on capital
budgeting and the importance it holds for the future of a business.
Benefits of CBT Direct’s Online Capital Budgeting Essentials Training
CBT Direct boasts the most beneficial online training on the market. With CBT Direct’s online training,
you have the flexibility to study on your schedule, and with the speed and reliability of the internet, CBT
Direct’s Capital Budgeting Essentials training course is accessible anywhere you have an internet connection.
Convenience finally costs less with CBT Direct - the most affordable online training solution today.
The unique design of CBT Direct’s Capital Budgeting Essentials course emphasizes learner initiative, self-management
and experiential learning. CBT Direct’s online course design begins with the definition of user-focused performance
objectives and then proceeds to the selection and implementation of instructional strategies and learning activities
appropriate for those objectives. This effective instruction model for CBT Direct’s Capital Budgeting Essentials
training course ensures the greatest level of comprehension and retention.
Who Benefits from CBT Direct’s Online Capital Budgeting Essentials
Training?
CBT Direct’s self-paced online Capital Budgeting Essentials course would be beneficial to finance and non-finance
professionals, functional managers, executives, and any individual serving in key roles involved directly or indirectly
with the capital budgetary planning and process in an organization.
What Professionals Will Learn from CBT Direct’s Online Capital Budgeting Essentials Training
This self-paced online course examines the value of following the capital budgeting process, identifying the three
stages in that process: project identification and screening, quantitative assessment, and capital allocation and
rationing. The course then focuses on the first stage, exploring how to identify opportunities for capital investment,
and subject these initial ideas to preliminary screening based on their feasibility, alignment with organizational strategy,
and dependence on other projects.
CBT Direct's online course explains the time value of money concept, and shows how to determine net present value
and internal rate of return for projects. Students will explore the strengths and limitations of each of these methods
for making decisions, and demonstrates how to use their decision rules to determine which capital investment projects
will add the most value to your organization.
Click here to see a detailed curriculum outline.
This course teaches the two essential tools commonly used in the capital budgeting process, profitability index and
discounted payback period, and demonstrates how to calculate each. Learners will examine the strengths and limitations
of these tools, and describes how organizations use them to guide their investment decisions.
The course introduces the process of allocating capital based on qualitative assessment factors, and incorporating
other qualitative factors – such as the priority of projects – into the allocation of decisions. Finally, CBT Direct's
Capital Budgeting Essentials training discusses the benefits of project monitoring and post-implementation auditing.
Capital Budgeting Essentials
