Investment Appraisal

COURSE INFORMATION

COURSE NAME

Investment Appraisal

Course Code

 

Course Type

Optional

Level of Course

Undergraduate

Year of Study

3rd / 4th

Term

Fall

ECTS Credits

5

Name of Instructor

Owen O’Donnell

E-mail

ood@uom.gr

Office Hours

Tues. 15:00-16:00, Thur. 12:00-13:00

In-Classroom Study

4 hours

Out-of-Classroom Study

2 hours

Objective of the Course

To introduce the theory and practice of financial, economic and social appraisal of investments. To give students experience of conducting investment appraisal through case-studies.

Prerequisites

Intermediate microeconomics recommended

Course Contents

Financial, economic and social appraisal; Investment criteria; Discounting; Welfare foundations of cost-benefit analysis; Identification of costs and benefits; Valuation of costs and benefits with perfect and imperfect markets; Valuation of intangibles; Social discount rate; Risk and uncertainty.

Recommended Readings

Brent, RJ (2007) Applied Cost-Benefit Analysis, Cheltnam, Edward Elgar
Layard, R and Glaister (1994) Cost-Benefit Analysis, Cambridge, Cambridge University Press

Teaching Methods

Lecture (2 hours). Exercises in laboratory using Excel (2 hours). Student presentations of case studies.

Assesment Methods

50% Assignment (Case study), 50% Final exam

Language of Instruction

English

Course Schedule

 

1. Week

Introductory lecture: Financial, economic and social appraisal

2. Week

Lecture: Investment Criteria.
Exercise: Net Present Value & Internal Rate of Return

3. Week

L: Welfare Foundations of Cost-Benefit Analysis
E: Mutually Exclusive Investments

4. Week

L: Identification of Costs and Benefits
E: Investment Choice with a Limited Budget

5. Week

L: Valuation of Costs and Benefits with Perfect Markets
E: Externalities

6. Week

L: Valuation of Costs and Benefits with Imperfect Markets
E: Shadow Prices

7. Week

L: Valuation of Intangibles
E: Environmental Effects

8. Week

L & E: Social Discount Rate

9. Week

L & E: Risk and Uncertainty

10.Week

Student Presentations of Case Studies

11.Week

Student Presentations of Case Studies

12.Week

Student Presentations of Case Studies