Course Details

Economy of Investment

Academic Year 2023/24

BVA008 course is part of 1 study plan

​ BPC-SI / E Winter Semester 4th year

Investment and national economy. Investment area (return, risk and liquidity). Time value of money. Feasibility study. Evaluation of economic efficiency and financial feasibility of structural investment projects. Procedures and methods for future development simulation of project. Economic efficiency ratios. Risk and uncertainty.

Course Guarantor

prof. Ing. Jana Korytárová, Ph.D.

Institute

Institute of Structural Economics and Management

Objective

Goal of this subject are knowledge and skills regarding to describe and analysis variables as inputs into calculation of economic efficiency. Creation of models for calculation of economic and financial feasibility of investment projects.

Knowledge

Creation of models for calculation of economic and financial feasibility of investment projects. Feasibility study.

Syllabus

1. Investment and economy growth, sorts of investment possibilities.
2. Theoretical appraisal for evaluation of economic efficiency of investment, time value of money.
3. Technical and economic study of the investment project – Feasibility study.
4. Specification of revenues and costs in various stages of the life cycle of the project.
5. Financing of construction investment projects, resources and costs.
6.–7. Creation of data for economic evaluation of investment projects, determining cash flows, methods for determining the discount rate.
8.–9. Economic analysis of investment projects – calculations of NPV, IRR, LCC and their interpretation.
10. Analysis of sources and causes of uncertainty, inflation.
11. Profitability analysis, break even point.
12.–13. Sensitivity analysis, qualitative and quantitative risk analysis.

Prerequisites

Knowledge of financial and taxation issues and orientation in construction cost estimates.

Language of instruction

Czech

Credits

6 credits

Semester

winter

Forms and criteria of assessment

course-unit credit and examination

Specification of controlled instruction, the form of instruction, and the form of compensation of the absences

Extent and forms are specified by guarantor’s regulation updated for every academic year.

Offered to foreign students

Not to offer

Course on BUT site

https://www.vut.cz/en/students/courses/detail/272945

Lecture

13 weeks, 2 hours/week, elective

Syllabus

1. Investment and economy growth, sorts of investment possibilities. 2. Theoretical appraisal for evaluation of economic efficiency of investment, time value of money.

3. Technical and economic study of the investment project – Feasibility study.

4. Specification of revenues and costs in various stages of the life cycle of the project.

5. Financing of construction investment projects, resources and costs.

6.–7. Creation of data for economic evaluation of investment projects, determining cash flows, methods for determining the discount rate.

8.–9. Economic analysis of investment projects – calculations of NPV, IRR, LCC and their interpretation.

10. Analysis of sources and causes of uncertainty, inflation.

11. Profitability analysis, break even point.

12.–13. Sensitivity analysis, qualitative and quantitative risk analysis.

Exercise

13 weeks, 2 hours/week, compulsory

Syllabus

1. Basic ratios for evaluation of the economic efficiency of investment.

2. Returns and inflation, the internal rate of return calculation, calculation example of bonds.

3. Calculation of the real net present value.

4. Calculation of life cycle costs.

5. Analysis of uncertainties – profitability analysis.

6. Analysis of uncertainties – sensitivity and probability analysis.

7. Assignment of project – production of wooden windows.

8. Continuation of project – resources of business plan financing.

9. Continuation of project – profit and loss statement, cash flow statement.

10. Optimization of financial resources - credit, leasing, bonds.

11. Continuation of optimization of financial resources.

12. Credit test.

13. Credit.