The aim of the course is to train students to independently conduct a cost-benefit analysis of an investment project. Based on the analysis, the student will be able to argue for the justification of the project from the perspective of the investor and society as a whole.
1. Basics of cost-benefit analysis of investment projects: Concept and types of investment projects. Concept of cost-benefit analysis. Steps in preparing a cost-benefit analysis.
2. Defining the context for cost-benefit analysis: Environmental analysis. Project identification. Technical feasibility and environmental sustainability.
3. Financial analysis of an investment project: Profit and loss account. Financial flow. Economic flow. Net present value. Internal rate of return. Payback period.
4. Basic assumptions for conducting cost-benefit analysis: Social discount rate. Fiscal adjustments. Conversion of market to accounting prices. Valuation of externalities (non-market impacts).
5. Economic analysis of an investment project: Economic benefits. Economic costs. Economic net present value. Economic rate of return. Benefit-cost ratio.
6. Risk assessment: Sensitivity analysis. Qualitative risk analysis.
1. Prepare a financial analysis of the investment project and assess its justification from the investor's point of view,
2. Prepare an economic analysis of the investment project and assess its justification from the perspective of society as a whole,
3. Compare the assessment of the investment project carried out from the investor's point of view with the assessment of the project from the point of view of society as a whole,
4. Evaluate the investment project from the perspective of the project risk analysis conducted.
