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Level 8 Diploma in Strategic Management and Leadership Practice

Capital Investment Appraisal Under Uncertainty

SMP810 · Strategic Financial Management — Week 10 of 16

CourseSMP810
Week10 of 16
SemesterII
TutorOnline in the course chat

This week’s topics

Capital Investment Appraisal Under Uncertainty

  1. Discounted cash flow techniques
  2. Net present value (NPV) versus internal rate of return (IRR)
  3. Modified IRR and profitability index
  4. Capital rationing and competing project selection
  5. CIMA P2 Discounted Investment Appraisal Techniques - Net present Value, IRR
  6. ACCA AFM | Investment Appraisal | Advanced Techniques | Modified IRR | MIRR | Lecture 7
  7. CIMA P2 Discounted cash flow - Capital Rationing

What you will be able to do

  • 5.1 Apply financial appraisal methods to analyse competing investment projects in different kinds of organisations.
  • 5.2 Justify strategic investment decision for an organisation using relevant financial information.

Activity

Start with this week’s 3 videos, then: Seminar, guided reading and a short written task: apply financial appraisal methods to analyse competing investment projects in different kinds of organisations.

Study materials

Videos

  • CIMA P2 Discounted Investment Appraisal Techniques - Net present Value, IRR · YouTube · OpenTuition · 36 min · for registered students
  • ACCA AFM | Investment Appraisal | Advanced Techniques | Modified IRR | MIRR | Lecture 7 · YouTube · Tutor Star · 28 min · for registered students
  • CIMA P2 Discounted cash flow - Capital Rationing · YouTube · OpenTuition · 23 min · for registered students
  • Session 13 (MBA): Time Weighted CF returns, Uncertainty & Equity Analysis · YouTube · Aswath Damodaran · 87 min · for registered students

Further resources

  • How Do CFOs Make Capital Budgeting and Capital Structure Decisions? · PDF · Reading, article · for registered students
  • MIT 15.401 Finance Theory I, lecture notes: Capital Budgeting · PDF · Other, slides · for registered students
  • Principles of Finance 2e, ch. 16.5: Choosing between projects · PDF · OpenStax, textbook chapter; pp. 480–485 · for registered students
Materials marked “for registered students” open in the student portal, which is set up as soon as you receive final acceptance.
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Admitted students ask questions on this week’s page in the student portal: an AI assistant trained on the course answers first, and during the course’s timetabled classes Connect to your tutor brings your tutor into the chat, who may start a call if needed.

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Course plan
  • Week 1: Strategic Cost Management and Systems Design
  • Week 2: Advanced Costing Optimisation and Pricing Strategies
  • Week 3: Advanced Financial Statement Analysis
  • Week 4: Corporate Portfolio Evaluation and Strategic Decision-Making
  • Week 5: Master Budget Architecture and Target Setting
  • Week 6: Critical Perspectives on Budgetary Control
  • Week 7: Strategic Working Capital and Funding Appraisals
  • Midterm: Midterm evaluation
  • Week 9: Long-Term Capital Structure and Funding Selection
  • Week 10: Capital Investment Appraisal Under Uncertainty
  • Week 11: Strategic Investment Governance and Qualitative Appraisals
  • Week 12: Applying Strategic Financial Management in practice: case s…
  • Week 13: Assignment workshop: research, planning and referencing
  • Week 14: Assignment workshop: drafting, feedback and improvement
  • Week 15: Review and coursework completion
  • Final: Final assessment and submission
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