Day 1

Time Value of Money, Discount Rates and Decision Criteria 

Textbook Chapters 1, 2 and 3

• Become familiar with present, future and annual value calculations, related terminology, and proper application of these concepts

• Understand calculation of Rate of Return, Growth Rate of Return, Net Present Value and Ratio Analyses for "income-producing" and "service-producing" investments

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Day 2

Application of Decision Criteria, Inflation

Textbook Chapters 4 and 5 

• Understand the proper application of Rate of Return, Net Present Value and ratios when evaluating mutually exclusive and non-mutually exclusive alternatives

• Consider the Dual Rate of Return analysis problem common to acceleration scenarios and reclamation or decommissioning costs and how to make a valid economic analysis of investment involving cost-income-cost in the sequence of cash flows

• Understand inflation and distinctions between time value and purchasing power of money

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Day 3

Inflation, Risk, Sensitivity Analysis and After-Tax Cash Flow

Textbook Chapters 5, 6, 7 and 8

• Follow discussion on escalated, constant and today's dollar evaluations

• Become familiar with the basics of "sensitivity" analysis as well as "risk adjusted" evaluations and how these address the basic elements of expected value and its incorporation into discounted cash flow calculations

• Understand expensing vs capitalizing costs and related depreciation, depletion and amortization tax deductions for determination of project taxable income for state and federal income tax purposes

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Day 4

Application of Criteria in an After-Tax Environment

Selected Textbook material from Chapters 8, 9 and 10

• Become familiar with making after-tax discounted cash flow analysis of various investment scenarios through discussion of tax issues

• Understand the elements of working capital and its impact on cash flow and project economics

• Develop the ability to make after-tax break-even calculations in escalated or constant dollars

• Understand the relationship between operating cost-savings and before-tax revenue

• Relate after-tax NPV results to the before-tax value of projects and investments

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* Course ends at Noon on Day 4