Investment analysis

ECTS: 5

COURSE OBJECTIVES

• Knowledge about the nature of investment projects;
• Understanding the differences between stated annual interest rates and effective annual rate.

COURSE CONTENT

1. Nature of investment projects.
2. The time value of money.
3. Calculating the future value of a single sum of money.
4. Calculating the present value of a single sum of money.
5. Distinguishing between the stated annual interest rate and the effective annual rate.
6. Calculating the effective annual rate, given the stated annual interest rate and the frequency of compounding.
7. Solving time value of money problems when compounding periods are other than annual.
8. Calculating the payback period – with a series of even and uneven cash flows.
9. Annuity – calculating the future value of an ordinary annuity.
10. Perpetuity – calculating the present value of a perpetuity.
11. Calculating the net present value (NPV).
12. Calculating the internal rate of return (IRR).