Capital budgeting is the critical process of planning and managing long-term investments, such as new projects, equipment purchases, or business expansions. It is the cornerstone of a company's strategic growth, as sound capital budgeting decisions can create significant value, while poor choices can lead to financial distress. This training course is designed to provide you with a robust framework for evaluating potential investments, enabling you to make confident, data-driven financial decisions that will drive your organization's long-term success and profitability.

This comprehensive program moves beyond theoretical concepts to give you practical skills in investment appraisal. You will master the key techniques used to analyze and select projects that align with your company’s strategic objectives and risk tolerance. By the end of this course, you will be equipped to calculate project returns, assess financial feasibility, and present compelling, well-supported investment proposals to senior leadership, positioning yourself as a crucial contributor to your company's financial health and strategic direction.

Duration

5 days

Target Audience

• Financial managers and analysts
• Corporate finance professionals
• Project managers
• Accountants
• Strategic planners
• Senior executives and decision-makers
• Investment bankers
• Business development managers
• Entrepreneurs and small business owners
• Individuals involved in long-term financial planning

Objectives

• Understand the core principles of capital budgeting.
• Evaluate different investment appraisal techniques.
• Calculate the time value of money and its impact on projects.
• Assess project risk and uncertainty.
• Develop a systematic process for capital project evaluation.
• Analyze and interpret financial data for investment decisions.
• Master advanced capital budgeting methods.
• Justify investment proposals with quantitative and qualitative analysis.
• Implement best practices for post-audit of capital projects.

Course Modules

Module 1: Introduction to Capital Budgeting

• The role of capital budgeting in strategic planning.
• Overview of the investment appraisal process.
• The difference between independent and mutually exclusive projects.
• Key drivers of capital investment decisions.
• The importance of cash flows over accounting profits.

Module 2: Time Value of Money and Financial Mathematics

• Present value and future value concepts.
• Calculating net present value (NPV).
• The concept of the internal rate of return (IRR).
• The payback period and discounted payback period methods.
• Comparing different investment appraisal techniques.

Module 3: Cash Flow Estimation

• Identifying relevant cash flows for a project.
• Distinguishing between initial, operating, and terminal cash flows.
• The impact of depreciation, taxes, and inflation on cash flows.
• How to handle sunk costs, opportunity costs, and side effects.
• A practical workshop on building a cash flow model.

Module 4: Risk and Uncertainty in Capital Budgeting

• Sources of project risk and how to measure them.
• Techniques for incorporating risk into analysis.
• Sensitivity analysis and its application.
• Scenario analysis for a range of possible outcomes.
• Decision trees for sequential investment decisions.

Module 5: Cost of Capital and WACC

• Defining the cost of capital.
• The components of the weighted average cost of capital (WACC).
• Estimating the cost of debt and cost of equity.
• Practical methods for calculating WACC.
• Using the cost of capital as a discount rate.

Module 6: Advanced Capital Budgeting Topics

• Capital rationing and how to handle it.
• The role of real options in project valuation.
• The equivalent annual cost (EAC) method.
• How to handle non-traditional cash flow patterns.
• The importance of post-audit and project review.

Module 7: Strategic Application and Case Studies

• The strategic link between capital budgeting and corporate strategy.
• Applying investment appraisal to a full business case.
• Case studies from various industries.
• Presentation skills for investment proposals.
• A final workshop: developing a full capital budget for a sample company.

Training Approach

This course will be delivered by our skilled trainers who have vast knowledge and experience as expert professionals in the fields. The course is taught in English and through a mix of theory, practical activities, group discussion and case studies. Course manuals and additional training materials will be provided to the participants upon completion of the training.

Tailor-Made Course

This course can also be tailor-made to meet organization requirement. For further inquiries, please contact us on: Email: info@skillsforafrica.org, training@skillsforafrica.org Tel: +254 702 249 449

Training Venue

The training will be held at our Skills for Africa Training Institute Training Centre. We also offer training for a group at requested location all over the world. The course fee covers the course tuition, training materials, two break refreshments, and buffet lunch.

Visa application, travel expenses, airport transfers, dinners, accommodation, insurance, and other personal expenses are catered by the participant

Certification

Participants will be issued with Skills for Africa Training Institute certificate upon completion of this course.

Airport Pickup and Accommodation

Airport pickup and accommodation is arranged upon request. For booking contact our Training Coordinator through Email: info@skillsforafrica.org, training@skillsforafrica.org Tel: +254 702 249 449

Terms of Payment: Unless otherwise agreed between the two parties’ payment of the course fee should be done 7 working days before commencement of the training.