Course Details

This course is appropriate for a wide range of professionals but not limited to:

• Project Managers and Project Economists
• Financial Analysts and Controllers
• Business Development and Strategy Managers
• Engineers involved in capital planning and budgeting
• Investment and Commercial Managers

• Expert-led sessions with dynamic visual aids
• Comprehensive course manual to support practical application and reinforcement
• Interactive discussions addressing participants’ real-world projects and challenges
• Insightful case studies and proven best practices to enhance learning

By the end of this course, participants should be able to:

• Master Discounted Cash Flow (DCF) analysis and build comprehensive project financial models.
• Accurately calculate and interpret key economic metrics: NPV, IRR, MIRR, and Payback Period.
• Conduct rigorous Sensitivity and Scenario Analysis to assess project risk.
• Determine the optimal project discount rate (WACC) and capital structure.
• Evaluate the financial impact of project expansion, rehabilitation, or shutdown decisions.
• Present and justify investment recommendations to senior management and finance stakeholders.

DAY 1

Introduction to Project Economics and Cash Flow

• Welcome and introduction
• Pre-test
• The role of Economic Evaluation in the capital investment decision process
• Defining project scope and identifying relevant cash flows (initial, operating, terminal)
• Tax considerations, depreciation, and working capital requirements
• Introduction to the time value of money and the cost of capital
• Fundamentals of building a project cash flow statement

DAY 2

Discounting and Core Evaluation Metrics

• Calculating the discount rate: Weighted Average Cost of Capital (WACC) and risk adjustment
• Discounted Cash Flow (DCF) analysis principles and application
• Calculation and interpretation of Net Present Value (NPV)
• Calculation and interpretation of Internal Rate of Return (IRR) and Modified IRR (MIRR)
• Calculating the Payback Period and Discounted Payback Period

DAY 3

Advanced Valuation and Investment Decisions

• Decision rules: Ranking projects, managing capital rationing, and mutually exclusive projects
• Incorporating salvage value and terminal cash flows
• Existing Projects Expansion: Evaluating incremental cash flows, rehabilitation vs. replacement
• Analyzing sunk costs, opportunity costs, and external factors
• Application of Lease vs. Buy analysis

DAY 4

Risk, Uncertainty, and Sensitivity Analysis

• Identifying key variables for project sensitivity analysis (price, volume, cost)
• Conducting One-Way and Tornado Diagram Sensitivity Analysis
• Developing and assessing project Scenario Analysis (Best Case, Worst Case, Most Likely)
• Introduction to probabilistic techniques (Decision Trees and brief overview of Monte Carlo)
• Determining the project Break-Even Point

DAY 5

Capital Budgeting and Presentation

• Review of capital budgeting methods and strategic allocation
• Techniques for presenting economic evaluation findings and recommendations
• Case study analysis: Evaluation of a new facility vs. expansion of an existing one
• Summary of common pitfalls in project economic evaluation
• Post-test
• Certificate ceremony