Description and contextualization of the subject

The aim of this subject is to establish the foundations for the economic and financial management of investment projects, based on a critical review of the theoretical aspects and existing project appraisal methods and their applicability. The aim is to transmit to the student the basic principles of the investment project valuation process, as well as its importance and applicability in different contexts such as project management evaluation processes, as a tool for measuring the creation of value, etc. The course will address the methodology for project management in a theoretical and practical way. Part of the teaching will take place in the computer classroom so that students will be able to develop project evaluation models in Excel.

Learning outcomes of the subject

The student who successfully completes this course should be able to:



- Organise the economic management of a project

- Identify the economic-financial elements that influence a project.

- Carry out an evaluation of a project

Ordinary call: orientations and renunciation

The evaluation of the subject is carried out continuously throughout the course.



The following factors are taken into account in the grading of the course:

Attendance (30%): Although attendance is not compulsory, it is highly recommended due to the contents developed in the classroom. For this reason, attendance forms part of the calculation of the final grade.

Individual assignments (40%): Students must hand in an assignment designated at the beginning of the course. The work will be handed in by uploading it to egela within the defined deadlines. In order to pass the course, the work must have obtained a grade higher than 5 out of 10.

Exam (30%): As in the certification exams of the associations of project management professionals, the exam will be in the form of a test with several answer options. In order to pass the course, the work must have obtained a grade of more than 4 out of 10.

The grade for the course will be obtained by applying the corresponding weight to each of the factors (attendance, individual work, team work, exam).

If the work has not been passed, the final mark for the course will be No Show.

If the exam mark is lower than 4.0, the final mark for the course will be that corresponding to the exam mark.

If the student decides to waive the Continuous Assessment of this subject, he/she must communicate it in writing before the deadline for the submission of the individual work. This date can be found in the Student Guide handed out in class and available on the eGela platform.

In this case, in order to pass the course, the student will be assessed by means of a written exam that may contain additional questions to those posed in the exam to which continuously assessed students are submitted and that will include all the contents studied throughout the four-month period corresponding to the exam.

In the event that health conditions prevent the completion of a teaching activity and/or face-to-face assessment, a non-face-to-face mode will be activated, of which students will be promptly informed (applicable to all exam sessions: ordinary, extraordinary and advance).

Extraordinary call: orientations and renunciation

Those who have to sit the extraordinary call will do so in the same way as they did in the ordinary call. In other words, those who took the continuous assessment will complete the tests (individual work, team work, exam) that they did not pass in the ordinary call.

The grade for the course will be obtained by applying the corresponding weight to each of the factors (attendance, individual work, team work, exam).

If any of the work (individual or team work) has not passed the established cut-off mark, the final mark for the course will be No Show.

If the exam mark is lower than 4.0, the final mark for the course will be that corresponding to the exam mark.

Those who waive the continuous assessment, will be submitted to a written and oral exam as described in the previous section (Ordinary call: orientations and waiver).

Temary

1. APPRAISAL OF INVESTMENT PROJECTS: I

1.1. INTRODUCTION

1.2. THE INVESTMENT DECISION IN THE FIRM

1.3. CONCEPT OF INVESTMENT

1.4. VARIABLES THAT DETERMINE THE PROFITABILITY OF AN INVESTMENT PROJECT

- The initial outlay or initial net cash flow.

- Net cash flows

- The discount rate



2. VALUATION OF INVESTMENT PROJECTS: II

2.1. APPROXIMATE METHODS FOR THE SELECTION OF INVESTMENT PROJECTS

- Approach. Basic assumptions under conditions of certainty

- Accounting rate of return

- Average net cash flow per disbursed monetary unit

- Payback period

2.2. CLASSICAL INVESTMENT PROJECT SELECTION METHODS

- Net present value (NPV)

- Internal rate of return (IRR)

- Comparison of the two methods



3. RISK IN THE SELECTION OF INVESTMENT PROJECTS

3.1. INTRODUCTION

3.2. THE MATHEMATICAL EXPECTATION OF VAN

3.3. RISK ADJUSTMENT OF THE DISCOUNT RATE

3.4. THE REDUCTION OF NET CASH FLOWS TO CERTAINTY

3.5. FINANCIAL PLANNING MODELLING IN EXCEL

Bibliography

Compulsory materials

The course is managed through the egela platform. Here the student will find the transparencies used in class and other help materials. The statements of individual and team assignments will also be found there, and the places where to upload them.

Basic bibliography

- BREALEY, R., MYERS, S. y MARCUS, A.J.: "Fundamentos de financiación empresarial", Mcgraw-Hill, Madrid 2019

- BREALEY, R., MYERS, S. y ALLEN, F. "Principios de finanzas corporativas", Mcgraw-Hill, México 2018

- RODRIGUEZ, A.: “Estrategias de planificación financiera”, Andavira editora, Santiago de Compostela 2014

- RODRIGUEZ, A.: “Dirección financiera Aplicada: Inversiones”, Andavira editora, Santiago de Compostela 2012

- RODRIGUEZ, A.: “Modelos de análisis y valoración de proyectos de inversión”, Andavira editora, Santiago de Compostela 2013

- RODRIGUEZ, A.: “Modelos de planificación y valoración de empresas”, Andavira editora, Santiago de Compostela 2015

- ROSS, A.R., WESTERFIELD, R. W. y JAFFE, J.F.: “Finanzas corporativas”, Madrid, 2011

Journals

International Journal of Project Management



Project Management Journal

Links

https://www.pmi.org/ (2021)



http://www.ipma.world/ (2021)