Pre-investment Review of Financial Models

An investment project is a serious venture for a company that differs from day-to-day operations in terms of costs and time horizon. Both factors increase the uncertainty and risks of the project. The probability of project failure is maximum at the initial stage and minimum at the completion stage, which emphasises the importance of the pre-investment review of the financial model.

Learning objectives

  • Understand the process of investment decision-making.
  • Discuss and justify the assumptions made in investment appraisal.
  • Know the common capital budgeting mistakes that managers make.
  • Apply techniques that quantify and present risk to stakeholders.
  • Select and apply techniques for managing risk and uncertainty in capital projects.

Additional information

Target audience

CFOs, finance business partners, investment managers, investment / financial / credit analysts, management accountants, project managers, internal auditors.

Timing and delivery

8 academic hours. Sessions can be in-person or delivered virtually:
- 1 day (9:00 – 16:30)
- 2 webinars (9:00 – 12:15)
We offer this course in a closed form, tailored to the needs of a given client.

 

Training program

The training program below is a sample and can be modified to meet the unique business needs of the organization.

 

General logic of investment
project appraisal

  • Assumptions and constraints. Financial model templates.
  • Investment decision criteria for a standalone project and portfolio of projects.
  • Behavioral considerations of the investment decision-making process.

 

 

 

Justification of the input
parameters and common
capital budgeting mistakes 

  • Defining the projection horizon.
  • Incorporating economic responses into the revenue and operating expenses (OPEX) projection.
  • Over-/underestimating overhead costs.
  • Handling sunk costs and opportunity costs.
  • Capital expenditure (CAPEX) justification.
  • Appropriate discount rates.
  • Appropriate decision criteria.
  • Accounting investment alternatives.

 

 

 

Dealing with
risk in investment appraisal decisions 

  • Sensitivity analysis.
  • Scenario analysis.
  • Monte Carlo simulation.
  • Stress testing.
  • Value at risk (VaR).
  • Decision trees and multi-stage decision problems.
  • Real options.
  • Adding a risk premium to the discount rate.

Organisational information

Number of participants

The Client can include up to 20 members of their team in the session.

Price

Please contact us. Because of flexible deployment of the program, the price is determined individually and will depend on the scope and unique business needs of the client.

Proposed date

Please contact us. The training session will be delivered at a time agreed upon by PwC’s Academy and the Client. Trainers will be dedicated to conduct the training session according to their availability.

Place

PwC Academy office Polna 11 Warsaw, 00-633, Poland Any other available place.

Contact us

Svitlana Zasukhina

Trainer, Senior Manager, MBA, CFA, ACMA/CGMA, CIA, PwC Poland

Tel: +48 519 062 937

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