Applying Investment Decision Rules for Startups

The previous course taught you how to analyze financial statements and make an estimate of your future financial situation. This course will teach you capital budgeting. This is how to make an investment decision. The best project from all the options is what you want. First, you must know the criteria. This course will teach you the most common investment decision criteria, such as IRR and NPV. You can create a pro forma financial statement using financial analysis and the discounted cash flow method. This will allow you to estimate project cash flows and make financial projections. Next, you will apply investment criteria to decide whether or not to invest. You will learn how to use NPV, IRR, and scenario to make investment decisions. You will also learn the Payback period method as well as IRR to help you decide whether or not to invest in situations such capital rationing or political risk.