Everyday in business, managers are faced with making key decisions that impact the future of their companies. Determining whether or not a capital investment should be undertaken is one of the most important strategic decisions a company can make. These decisions often determine whether a company enters a new market, develops a new product, or makes an acquisition. Such decisions affect, not only those making the decisions, but all those who have to live with the results of those decisions. A wrong decision can cost a company millions and employees, their livelihoods.

With the stakes so high, it is important, not only to make the right business decisions, but to identify and learn from the wrong ones. Decisionmakers must take steps to cut their losses on failing projects. It is imperative that all relevant data and options are objectively analyzed and evaluated before a critical decision is made and the project is implemented. But it doesn't end there—constant monitoring needs to be done by management, once the project is in place. The financial model that should be used as the cornerstone of these decisions and monitoring tools is the net present value model.

Corporate Financial Management focuses on these issues, along with various topics impacting today's businesses. This program illustrates why the net present value model is the best model to use under all circumstances, details how to calculate net present value, and explains why it should be preferred to the other financial decision-making models. In this course, we will discover what costs are relevant in capital acquisitions; what is the appropriate discount rate to use when converting future cash flows into present-day cash flows; and how this discount rate is based on the weighted average cost of capital. The program also emphasizes the need for due diligence and post audits once a project is in place.

Anyone wishing to contact the author of this program regarding further help with maximizing the effectiveness and efficiency of cash flows should contact C. Lynn Northrup directly at cln@northrupcpa.com.

Use of Materials

Online
The user should begin by watching the streamed video segment, if any, or listening to the streamed audio segment, if any, for the chapter before reading the text. The user may wish to make notes of the most important concepts and any terms that are new. Next, the user should review the learning objectives at the beginning of the chapter and read the chapter. The user should work through each of the examples. After the user has studied each chapter, s/he should click on the link at the left to complete the interactive study questions. If the user answers a study question incorrectly, s/he should review the section of the text that is indicated at the end of the explanation to the study question to assure comprehension of the material. The user should review the learning objectives once more to consider achievement of the objectives. After the user has finished watching the streamed video, if any, or listening to the streamed audio, if any, and reading the text and working through the study questions, s/he may wish to review her/his notes and any sections of the text or video/audio, if any, that were difficult. When the user is ready, s/he should click on the link to the left to complete the quizzer. The user's CPE certificate will be provided immediately upon successful completion of the quizzer.

Software
The user should begin by reviewing the learning objectives at the beginning of the chapter and read the chapter. The user should work through each of the examples. As the user studies each chapter, s/he should complete the interactive study questions that appear in the lower panel of the screen. If the user answers a study question incorrectly, s/he should review the section of the text that is indicated at the end of the explanation to the study question to assure comprehension of the material. The user should review the learning objectives once more to consider achievement of the objectives. After the user has finished reading the text and working through the study questions, s/he may wish to review her/his notes and any sections of the text that were difficult. When the user is ready, s/he should click on the link at the far left to complete the quizzer. The user should email her/his quizzer statistics using the quizzer submission link in the software and the user's CPE certificate will be mailed to her/him.

Chapter 1 gives an introduction to corporate financial management and the financial models.

Chapter 2 discusses how to determine the proper discount rate to use in the financial model.

Chapter 3 explores relevant cash flows in capital budgeting.

Chapter 4 focuses on the importance of post audits.

Chapter 5 examines working capital management.

Chapter 6 addresses the importance of due diligence for successful acquisitions.

Throughout this program, the user will find explanations and discussions regarding some of the issues that often face practitioners. In order to enhance the user's comprehension of the material and highlight important practical considerations, this program includes the following designations:

A Biskpoint presents analysis or commentary that attempts to explain or clarify authoritative guidance.

A Bisktip provides practical advice that may be used to help improve client service or service to the practitioner's organization.

• Discuss the importance of using cash flows for financial projections

• Explain the shortfalls of using the internal rate of return model

• Identify why the net present value model always provides the correct answer

• Calculate the weighted average cost of capital

• Choose a discount rate given the weighted average cost of capital

• Define what incremental and differential cash flows are for any capital budgeting decision

• Discuss the relevance of post audits

• Define what working capital is and why it is important to manage it

• Explain why due diligence is important

C. Lynn Northrup, CPA, CPIM, is an author, authoritative business advisor and consultant. He develops and delivers executive educational programs based on his professional expertise in operations, performance measurement, and strategic cost management. He has managed major projects selecting and implementing ERP systems. Mr. Northrup has 40 years of experience as a controller, a CPA, and an operational consultant serving a wide variety of industries. Mr. Northrup has specialized in conducting operational and workflow assessments focused on business process improvement (Lean Manufacturing and Six Sigma). He has extensive knowledge and experience in business performance management and measurement and the application of strategic cost management and analysis concepts. Mr. Northrup's training programs have been given to state societies of CPAs nationwide and to large audiences at regional and national conferences. His training experience includes national and regional CPA firms and for national providers of continuing professional education. Mr. Northrup was previously with McGladrey & Pullen's national manufacturing consulting practice, PricewaterhouseCoopers, and has held various management and executive positions in industry including Controller, Vice President of Finance, and President and Chief Operating Officer. (Author)