This training consists of 2 topics : Fundamentals of Capital Budgeting (2 days) and Capital Budgeting and Valuation of the Project with Leverage (1 Day)

1. IN-HOUSE TRAINING CLASS
Contact : Sukarnen.suwanto@futurumcorfinan.com
Basic Class
FUNDAMENTALS OF CAPITAL BUDGETING (2 DAYS)
Topic Subtopic
Forecasting Earnings Revenue and Cost Estimates
Incremental Earnings Forecast
Indirect Effects on Incremental Earnings
Sunk Costs and Incremental Earnings
Determining Free Cash Flow and Net
Present Value
Calculating Free Cash Flow from Earnings
Calculating Free Cash Flow Directly
Calculating the Net Present Value
Choosing Among Alternatives Evaluating Alternatives
Further Adjustments to Free Cash Flow
Analyzing the Project Break-Even Analysis
Sensitivity Analysis
Investment Decision Rules
NPV and Stand-Alone Projects Applying the NPV Rule
The NPV Profile and IRR
Alternative Rules vs the NPV Rule
The Internal Rate of Return Rule Applying the IRR Rule
Pitfall #1 : Delayed Investments
Pitfall #2 : Multiple IRRs
Pitfall #3 : Nonexistent IRR
The Payback Rule Applying the Payback Rule
Payback Rule Pitfalls in Practice
Choosing Between Projects NPV Rule and Mutually Exclusive Investments
IRR Rule and Mutually Exclusive Investments

2. Intermediate Class
CAPITAL BUDGETING AND VALUATION WITH LEVERAGE (1 DAY)
www.futurumcorfinan.com
The Incremental IRR
Project Selection with Resource Constraints Evaluating Projects with Different Resource
Requirements
Profitability Index
Shortcomings of the Profitability Index
STUDY CASE
Topic Subtopic
The Weighted Average Cost of Capital
(WACC) Method
Using the WACC to Value a Project
Implementing a Constant Debt-Equity Ratio
The Adjusted Present Value (APV) Method The Unlevered Value of the Project
Valuing the Interest Tax Shield
The Flow-to-Equity Method Calculating the Free Cash Flow to Equity
Valuing the Equity Cash Flows
What Counts as “Debt”?
Project-Based Costs of Capital Estimating the Unlevered Cost of Capital
Project Leverage and the Equity Cost of capital
Determining the Incremental Leverage of a Project
APV with Other Leverage Policies Constant Interest Coverage Ratio
Predetermined Debt Levels
A Comparison of Methods
Other Effects of Financing Issuing and Other Financing Costs
Financial Distress and Agency Costs