The major theme of this module is to learn how financial resources available to any entity be allocated to the many alternative investment projects. Building of a new plant; Replacement of an equipment; Refunding or selling of bonds; Introduction of a new product into the market; Making versus hiring; Leasing versus buying, etc. all have alternative courses of actions from which to choose from. They are all to small or large extent capital budgeting decision making problems, to which there are theoretically explanable solutions. This module answers questions of capital budgeting through relevant techniques and models.
The course is organized in a logical sequence beginning with a description of the investment environment, which includes the concepts of return and risk. We examine common stocks, fixed income securities, and other investment vehicles considering their valuation procedures. Models used in portfolio management, and performance measurement & evaluation methods will be the last chapters of the course.