Applying Investment Decision Rules for Startups

Grow your skills with Coursera Plus for $239/year (usually $399). Save now.

Applying Investment Decision Rules for Startups

This course is part of Valuation and Financial Analysis For Startups Specialization

Instructor: Saeyeul Park

7,963 already enrolled

Included with

Learn more

4 modules

Gain insight into a topic and learn the fundamentals.

87 reviews

Beginner level

No prior experience required

1 week to complete

at 10 hours a week

Flexible schedule

Learn at your own pace

4 modules

Gain insight into a topic and learn the fundamentals.

87 reviews

Beginner level

No prior experience required

1 week to complete

at 10 hours a week

Flexible schedule

Learn at your own pace

Skills you'll gain

Tools you'll learn

Microsoft Excel

Details to know

Shareable certificate

Add to your LinkedIn profile

Assessments

9 assignments

Taught in English

See how employees at top companies are mastering in-demand skills

Learn more about Coursera for Business

logos of Petrobras, TATA, Danone, Capgemini, P&G and L'Oreal

Build your subject-matter expertise

This course is part of the Valuation and Financial Analysis For Startups Specialization

When you enroll in this course, you'll also be enrolled in this Specialization.

Learn new concepts from industry experts
Gain a foundational understanding of a subject or tool
Develop job-relevant skills with hands-on projects
Earn a shareable career certificate

There are 4 modules in this course

In the previous course, you learned financial statement analysis and how to make estimate of future financial status. In this course, you are going to learn capital budgeting. That is, how to make an investment decision. You would like to select the best project among various projects you can take. Then, you need to know the criteria. In this course, you are going to learn investment decision criteria such as NPV and IRR, which are most popular decision rules. Using financial analysis and discounted cash flow method, you can make pro forma financial statement and estimate project cash flows. Then, you apply investment criteria to determine whether to invest or not. After learning how to apply NPV and IRR method to investment decision, you are going to learn how to evaluate NPV estimate and scenario, what-if analyses and break-even analysis. In addition to NPV and IRR, you are going to learn Payback period method and Profitability method to determine whether to invest or not when there is a political risk or capital rationing.

Capital budgeting is the process of deciding whether to undertake an investment project. In this module, you will study the three most popular capital budgeting techniques in practice: Net present value (NPV), Payback period, and Internal rate of return (IRR).

What's included

5 videos4 readings2 assignments1 discussion prompt

5 videos Total 29 minutes

Welcome to This Course 1 minute
1.1 Introduction to Capital Budgeting 4 minutes
1.2 Net Present Value (NPV) 7 minutes
1.3 Payback Period 9 minutes
1.4 Internal Rate of Return 8 minutes

4 readings Total 40 minutes

1.1 Slide 10 minutes
1.2 Slide 10 minutes
1.3 Slide 10 minutes
1.4 Slide 10 minutes

2 assignments Total 60 minutes

Practice Quiz (1.1~1.4) 30 minutes
Week 1 Quiz 30 minutes

1 discussion prompt Total 20 minutes

IRR assumption & NPV assumption 20 minutes

In this module, you will learn how to estimate project cash flows using Excel. Overall, project cash flow analysis is similar to firm-level cash flow analysis. However, there also exist some unique features of a project cash flow analysis, which requires us to study the project cash flow principles.

What's included

4 videos4 readings2 assignments

4 videos Total 33 minutes

2.1 Project Cash Flow Principles 6 minutes
2.2 Pro Forma Income Statement 9 minutes
2.3 Free Cash Flow 8 minutes
2.4 Sensitivity Analysis 9 minutes

4 readings Total 40 minutes

2.1 Slide 10 minutes
2.2 Slide 10 minutes
2.3 Slide 10 minutes
2.4 Slide 10 minutes

2 assignments Total 60 minutes

Practice Quiz (2.1~2.4) 30 minutes
Week 2 Quiz 30 minutes

Sometimes you have to evaluate multiple projects at a time. In this module, you will learn how to choose the best project among multiple projects. We will also discuss various important issues in NPV and IRR techniques. Finally, we discuss the fundamental principle in choosing the discount rate.

What's included

4 videos4 readings2 assignments

4 videos Total 30 minutes

3.1 Evaluating Multiple Projects 6 minutes
3.2 Comparing NPV and IRR techniques I 7 minutes
3.3 Comparing NPV and IRR techniques II 11 minutes
3.4 Choosing the Discount Rate 7 minutes

4 readings Total 40 minutes

3.1 Slide 10 minutes
3.2 Slide 10 minutes
3.3 Slide 10 minutes
3.4 Slide 10 minutes

2 assignments Total 60 minutes

Practice Quiz (3.1~3.4) 30 minutes
Week 3 Quiz 30 minutes

We continue to study analyzing business projects, but the difference in this module is that now we consider the value of "real options" embedded in the project. You will learn how to estimate the project's value by using the decision tree approach or the Black-Scholes option pricing model.

What's included

4 videos4 readings3 assignments1 discussion prompt

4 videos Total 32 minutes

4.1 Options Basics 7 minutes
4.2 Decision Tree Approach 8 minutes
4.3 Black-Scholes Option Pricing Model 10 minutes
4.4 Evaluating Projects Using B-S Model 7 minutes

4 readings Total 40 minutes

4.1 Slide 10 minutes
4.2 Slide 10 minutes
4.3 Slide 10 minutes
4.4 Slide 10 minutes

3 assignments Total 150 minutes

Practice Quiz (4.1~4.4) 30 minutes
Week 4 Quiz 40 minutes
Final Quiz 80 minutes

1 discussion prompt Total 20 minutes

Applying the B-S model to price a real option 20 minutes

Earn a career certificate

Add this credential to your LinkedIn profile, resume, or CV. Share it on social media and in your performance review.

Instructor

Instructor ratings

(11 ratings)

Saeyeul Park

Yonsei University

1 Course 7,963 learners

Offered by

Yonsei University

Explore more from Finance

Coursera
Analyze and Guide Capital Investments
Course
Duke University
Investment Evaluation
Course
Duke University
Startup Valuation Methods
Course
Yonsei University
Valuation and Financial Analysis For Startups
Specialization

Why people choose Coursera for their career

Felipe M.

Learner since 2018

"To be able to take courses at my own pace and rhythm has been an amazing experience. I can learn whenever it fits my schedule and mood."

Jennifer J.

Learner since 2020

"I directly applied the concepts and skills I learned from my courses to an exciting new project at work."

Larry W.

Learner since 2021

"When I need courses on topics that my university doesn't offer, Coursera is one of the best places to go."

Chaitanya A.

"Learning isn't just about being better at your job: it's so much more than that. Coursera allows me to learn without limits."

Learner reviews

5 stars
74.71%
4 stars
16.09%
3 stars
5.74%
2 stars
0%
1 star
3.44%

Showing 3 of 87

Reviewed on Aug 21, 2019

Course was a lot cleaner, as far as mistakes in the quizzes / tests than the previous three courses; accordingly, I was able to focus on the material and get done a lot faster. Good course.

Reviewed on Jul 22, 2017

All things are explained in a well manner..!! Helped a LOT..!

View more reviews

Open new doors with Coursera Plus

Unlimited access to 10,000+ world-class courses, hands-on projects, and job-ready certificate programs - all included in your subscription

Learn more

Advance your career with an online degree

Earn a degree from world-class universities - 100% online

Explore degrees

Join over 3,400 global companies that choose Coursera for Business

Upskill your employees to excel in the digital economy

Learn more

Frequently asked questions

To access the course materials, assignments and to earn a Certificate, you will need to purchase the Certificate experience when you enroll in a course. You can try a Free Trial instead, or apply for Financial Aid. The course may offer 'Full Course, No Certificate' instead. This option lets you see all course materials, submit required assessments, and get a final grade. This also means that you will not be able to purchase a Certificate experience.

When you enroll in the course, you get access to all of the courses in the Specialization, and you earn a certificate when you complete the work. Your electronic Certificate will be added to your Accomplishments page - from there, you can print your Certificate or add it to your LinkedIn profile.

Yes. In select learning programs, you can apply for financial aid or a scholarship if you can’t afford the enrollment fee. If fin aid or scholarship is available for your learning program selection, you’ll find a link to apply on the description page.