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Economic Evaluation of Projects

Code 16488
Year 2
Semester S2
ECTS Credits 6
Workload TP(60H)
Scientific area Economics
Entry requirements No entry requirements.
Mode of delivery Theoretical-Practical.
Work placements Not applicable
Learning outcomes - To develop project design and evaluation skills;
- To enable students to develop a coherent economic discourse;
- Prepare students for economic and financial decision-making; identify investment opportunities and implement them;
- Provide tools, instruments and techniques for the economic and financial evaluation of real assets;
Syllabus 1 - Project feasibility studies
1.1 - The concept of an investment project
1.2 - Project phases
1.3 - Project feasibility studies
1.4 - Project selection
2. The CASH FLOW concept
2.1 Estimating cash flows according to the type of investment
2.2 Opportunity cost of capital
2.3 Investment and financing decisions
2.4 Equity and debt capital
2.5 Weighted average cost of capital (WACC)
3 Investment decision assessment methodologies
3.1 Net Present Value (NPV)
3.2 Internal Rate of Return (IRR)
3.3 Project Profitability Index (PRI)
3.4 Payback
3.5 NPV VS IRR
4. Valuation techniques based on cash flows and techniques for analysing risk and uncertainty.
4.1 Adjustment of the discount rate
4.2 CAPM (Capital Asset Pricing Model).
4.3 Analysing economic and financial indicators
5. Sensitivity Analysis for Project Valuation
5.1. Univariate sensitivity analysis
5.2 Multivariate sensitivity analysis
Main Bibliography Megre, L. (2018), Análise de Projetos de Investimento: Uma perspetiva económica, 2ª Edição, Lisboa, Edições Silabo.
Cebola, A. (2017), Projetos de Investimento de Pequenas e Médias Empresas: Elaboração e Análise. 2ª Edição, Lisboa, Edições Sílabo.
Boardman, A., (2014), Cost-benefit analysis: concepts and practice, 4th ed., Pearson Education Limited.
Bodies, Z., Kane, A., and Marcusm A., (2019) Essential of Investments, 11th Edition, McGrawHillDavidson, R. and J.G. MacKinnon (2003), Econometric Theory and Methods, Oxford University Press.
Teaching Methodologies and Assessment Criteria Classes are both theoretical and practical. Initially, in each session, the theoretical concepts related to the respective syllabus contents are presented, followed by the corresponding practical exercises.
Students are required to take two written tests, each weighted at 50%, for the purpose of obtaining the final grade for the teaching and learning period, whether to achieve the minimum grade for approval through continuous assessment or to gain access to the exam.
Minimum grade for approval through continuous assessment (teaching and learning period): grade = 9.5 (completion of both written tests is mandatory).
Minimum grade for the teaching and learning period to gain access to the exam: grade = 6 (completion of both written tests is mandatory).
Language Portuguese. Tutorial support is available in English.
Last updated on: 2026-02-25

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