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Modulbeschreibung - Preinvestment Analysis

ECTS 3.0
Level intermediate
Overview Investment management is an essential element in analyzing a company's profitability. Methods and models of investment calculation are used for both the procurement of capital goods and projects. They allow for an objective decision from a financial management perspective.

Static methods

  • cost comparison
  • profit comparison
  • return on investment
  • payback

Dynamic methods

  • net present value NPV
  • annuities
  • internal rate of return IRR
  • Baldwin interest rate
  • dynamic payback

Investment analysis

  • Fisher rate
  • future risk considerations
  • impacts of changes in net working capital
  • effects of inflation
  • effects of taxes
  • different useful lives
Learning objectives Students are able:

  • to apply static calculation methods to specific situations, to name strengths and weaknesses and to critically reflect the results;
  • to identify differences between static and dynamic methods and to choose adequate methods in a specific situation;
  • to correctly implement special conditions such as the impacts of investments on net working capital, different useful lives, or future risks in an investment; and to analyze the results of dynamic methods using a Fisher rate;
  • to make a complex analysis of an investment for capital goods and to correctly interpret the results in terms of the impacts on cash flow, statement of financial positions and income statement.
Previous knowledge

    • Konvergenz Rechnungswesen (krw)
    • Konvergenz Betriebswirtschaftslehre (kbwl)
Exam format Final written exam
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