Project Economics, Risk & Decision Analysis

This DIXONTECH course equips participants with comprehensive knowledge and analytical tools to evaluate, model, and optimize project investments under uncertainty. It focuses on economic evaluation, risk assessment, and decision-making frameworks that enable professionals to analyze project feasibility, forecast financial performance, and make informed strategic choices under complex and dynamic conditions.

TRAINING TOPICS

• Principles of project economics and investment appraisal
• Cost benefit and cash flow analysis
• Risk identification, quantification, and sensitivity analysis
• Monte Carlo simulation and probabilistic modeling
• Decision tree analysis and real options
• Integrated decision making and project evaluation models

BY THE END OF THIS TRAINING COURSE, DELEGATES WILL BE ABLE TO:

• Evaluate project financial feasibility using economic indicators
• Apply discounted cash flow (DCF) and NPV/IRR models
• Identify, assess, and quantify project risks
• Perform sensitivity and scenario analysis on project returns
• Use decision trees and probabilistic techniques for evaluation
• Integrate uncertainty and risk into financial models
• Optimize investment decisions under variable market conditions
• Present strategic recommendations based on quantified results

TRAINING IS TAILORED TO

•   Project and investment managers
•   Financial and risk analysts
•   Strategic planning and business development professionals
•   Engineers involved in feasibility studies
•   Economists and cost analysts
•   Decision support and planning officers
•   Corporate finance and capital budgeting teams
•   Professionals engaged in project valuation and assessment

TRAINING METHODOLOGY

This DIXONTECH program integrates lectures, quantitative exercises, and case-based workshops. Participants will use financial models, risk simulation tools, and decision support techniques to evaluate real world project cases. The course ensures hands on proficiency in economic analysis, uncertainty modeling, and decision-making optimization for project success.

DAY 1

PRINCIPLES OF PROJECT ECONOMICS AND INVESTMENT EVALUATION

•   Overview of project evaluation and decision-making process
•   Project economics in corporate and public sectors
•   Capital budgeting and long-term investment frameworks
•   Key economic indicators: NPV, IRR, PI, and payback period
•   Cost benefit and cost effectiveness analysis techniques
•   Inflation, taxes, and depreciation effects on project value
•   Financial vs. economic feasibility distinction
•   Case study: comparing two investment alternatives

DAY 2

CASH FLOW FORECASTING AND DISCOUNTED CASH FLOW ANALYSIS

•   Identifying and classifying project costs and revenues
•   Estimating incremental cash flows and working capital
•   Discount rates, cost of capital, and risk adjusted return
•   DCF based project appraisal techniques
•   Sensitivity of NPV to discount rate and cash flow changes
•   Using Excel for DCF modeling and valuation
•   Common errors in project economic analysis
•   Workshop: building a project DCF model

DAY 3

RISK IDENTIFICATION, QUANTIFICATION, AND SENSITIVITY ANALYSIS

•   Sources and types of project risks (technical, financial, market)
•   Qualitative vs. quantitative risk assessment methods
•   Sensitivity and scenario analysis for key project variables
•   Break even and elasticity analysis for decision support
•   Tornado and spider diagram interpretation
•   Correlation and dependency effects in project variables
•   Integrating risk analysis into project feasibility studies
•   Practical exercise: conducting a sensitivity analysis

DAY 4

PROBABILISTIC RISK MODELING AND MONTE CARLO SIMULATION

•   Introduction to probability and stochastic modeling
•   Using probability distributions for project inputs
•   Monte Carlo simulation principles and applications
•   Analyzing expected NPV, downside risk, and confidence levels
•   Software and tools for risk simulation (Excel @Risk, Crystal Ball)
•   Modeling uncertain project schedules and costs
•   Interpreting simulation outputs for decision making
•   Case study: running a project Monte Carlo simulation

DAY 5

DECISION ANALYSIS, REAL OPTIONS, AND STRATEGIC EVALUATION

•    Decision tree analysis for investment under uncertainty
•   Expected monetary value (EMV) and decision criteria
•   Incorporating managerial flexibility through real options analysis
•   Abandonment, expansion, and deferral options in projects
•   Risk adjusted discount rates and certainty equivalents
•   Integrating financial, economic, and risk dimensions in decisions
•   Presenting results to stakeholders for informed decision making
•   Final workshop: complete project economics and risk evaluation