Evaluation of Investment Projects

Through these discussions the student will strengthen the knowledge of a very complex process of investment decision-making.

By giving consideration to these issues the student will be enabled for the application of precise terminology in the field of investments as well as in the field of quantitative methods for the assessment of effectiveness of investment projects. At the same time, the practical problems and dilemmas that exist in investments will be indicated through the use of case studies.

Concept, process and classification of investments; Basic elements of the plan of investment projects; Projection of the residual value of revenues, expenditures, profit and net cash flow of investment projects; Statistical (traditional) methods for evaluation of the efficiency of investment projects, return period, accounting rate of return; Dynamic methods for evaluation of the efficiency of investment projects – net present value – profitability index – internal rate of return – conflict between the net present value and internal rate of return, multiple internal rate of return, modified internal rate of return; Assessment of company liquidity; Risk assessment of investment projects; Practical problems in the assessment of investment projects.

Lectures, discussions and analyses of typical cases. Pre-exam papers should be used to conduct independent research on this topic.

Colloquium I (0-20 points); Colloquium II (0-20 points); Final exam (0-50 points); Attendance (2point); Class activities (seminar papers, discussions, case studies) (0-8 points)

Đuričin, D. ( 2005). Managing (by) Projects. Belgrade: CID of the Faculty of Economics in Belgrade; Koletnik, F. (1991). What is the worth of the company. Zagreb: Association of Accountants and Financial Experts of Croatia; Mikerević, D. (2009). Financial Management. Banja Luka: Faculty of Economics, University of Banja Luka and Finrar