TRAINING CAPITAL BUDGETING AND MANAGERIAL DECISIONS

TRAINING CAPITAL BUDGETING AND MANAGERIAL DECISIONS

OVERVIEW 

Capital budgeting is an essential part of every company’s financial management. It involves examining investment assets and deciding whether or not those assets will achieve the company’s desired returns over an extended period of time. To effectively manage your company’s finances, you must evaluate a number of factors in making investment decisions.

Business decisions involve choosing between alternative courses of action and developing formal plans for future action. This course explains several methods of analysis that can help business managers to choose alternatives that offer the highest rate of return on investment or the greatest reduction in costs. In this course, topics such as capital budgeting and managerial decisions provide you with the concepts, procedures, and analytical skills you need to make informed decisions in today’s complex business environment.

OBJECTIVES:

1. Conceptual

· Explain the importance of capital budgeting.

· Describe the selection of a hurdle rate for an investment.

· Describe the importance of relevant costs for short-term decisions.

2. Analytical

· Evaluate short-term managerial decisions using relevant costs.

· Analyze a capital investment project using break-even time.

3. Procedural

· Compute payback period and describe its use.

· Compute accounting rate of return and explain its use.

· Compute net present value and describe its use.

· Compute internal rate of return and explain its use.

OUTLINE:

1. Basics of Capital Budgeting

· What is Capital budgeting?

· The capital budgeting process

· Importance of capital budgeting

· Capital budgeting success

· Difference between capital budgeting and operationalbudgeting

· Key features of capital budgeting

· Planning and control mechanism

2. Understanding the Purpose of Capital Budgeting

· The need to plan, control and evaluate performance

· Strategic and operational benefits of capital budgeting

· Capital budgeting in the changing business environment

· Capital budgeting success

3. Dos & Don’ts in Capital Budgeting

· Managerial / analytical skills required

· Control of ‘Slacks’ in capital budget setting

· Traditional budgeting Vs Capital budgeting

· Financial and non financial skills required in budgeting

4. Capital Budgeting Decision Rules

· Accounting Rate of Return

· Payback period for equal cash flow

· Internal Rate of Return

· Profitability Index

· Discounted future cash flow

· Net present value

· Simple case study on capital Budgeting

5. Understanding Cost Behaviour For Managerial Decisions

· Cost classification

· Behaviour of various costs-variable costs, fixed costs and semi-variable costs

· Break-Even Point-Importance of knowing BEP in advance

· BEP as a planning technique

· Cost-volume-Profit relationship

· Standard costing and variance analysis in budgeting

6. Types of Cost Invo lved in Managerial Decision Making

· Differential Cost, Incremental Cost, Avoidable Cost

· Relevant Cost

· Sunk Cost, Committed Cost, Notional Costs

· Out of Pocket Cost

· Common Cost

· Hidden Cost

· Opportunity Cost

· Sensitivity Analysis

7. Managerial Decision Making Tasks

· Accepting Additional Business

· Make or Buy Decisions

· Scrap or Rework Defects

· Sell or Process Further

· Selecting Sales Mix

· Identification of Decision Units

· Analysis of Divisional Operating Expenses.

Who Should Attends:

· Finance & Accounts Executives/Managers

· Those responsible for capital expenditure decisions

· Accountants needing a refresher of established techniques

· Business Owners responsible for managerial decisions

TRAINING METHOD

• Group Discussions
• Group & Individual Exercises
• Presentations
• Games
• Case Studies
• Role Plays
• Self-Assessment
• Action Plan

FACILITIES

• Certificate,
• Quality Training Kit (Pencil case: Erase, Bolpoint, Pencil, Tipe X, Stabillo, Flash Disk 8 GB),
• Bag.
• Training Material (HandOut & SoftCopy)
• Convenient training facilities in stars hotel (Public Training)
• Lunch and Coffee Breaks (Public Training)
• Souvenir

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Catatan :

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