Cooperative Learning and Transversality through a financial valuation software for investment projects

This work presents a proposal for educational innovation applied on corporate finance teaching in a context of higher education. We design an active learning activity that combines the methodologies of cooperative learning and project-based learning. Students from different degrees at Valencia University (Spain) enrolled in Finance courses are grouped in transversal work teams to design, planning, and value an investment project. Team formation relies on the personality RHETI test by Riso-Hudson (1999) to create soft and hard skill-balanced teams able to reach the team’s targets.

The investment project developed by each work team is carried out in a virtual environment to simulate the process of creation, planning and evaluation in economic and financial terms of the team’s project. Its implementation will be carried out through the R+ Cash valuation software. This software is free use and non-license access, available in a web environment through a computer support such as laptops, tablets, and smart phones with network connection.

The software developed through web environment is more preferable by users than downloadable desktop one because a number of advantages as the following: (i) Immediate access and multiplatform compatibility, (ii) Full availability, since it can be used anytime and anywhere, (iii) Continuous updating, (iv) Less RAM memory requirements, (v) Fewer bugs, and therefore less prone to crash and generate technical problems, and (vi) Multiple concurrent users at the same time. The first and basic version of the software provides the user with tables and graphs showing the main characteristics of the investment project and a list of profitability measurements. Specifically, the software translates the quantitative and qualitative information about the project into several financial outputs, such as: the stream of Free Cash Flows and Net Cash Flows (FCF, NCF) over the project’s lifetime, Net Present Value (NPV), Adjusted Present Value (APV), as standard profitability indicators in monetary terms, and Internal Rate of Return (IRR) in percentage terms. The ultimate version 2.0 overcomes some limitations or drawbacks and incorporate new modules to analyze the effect of uncertainty on the project valuation. Specifically, a risk module comprising three new utilities: Sensibility Analysis (SA), Beakeven point (BP), and MonteCarlo Simulation (MCS) is a priceless improvement.

In order to use the software, each team will receive an email address (team.@gmail.com) and a password that will allow each member of the team to access the application and edit the project folder, prepare reports, analyze the risk of the project. Additionally, the team will share material resources, for example, via Dropbox or Drive.

Communication among the members of a team will take place through an online chat available in Aula Virtual (AV). Likewise, periodically, they will hold meetings with the teacher by videoconference by the BlackBoard Collaborate (BBC) platform, which is also available in AV, and write a short report with the content of that meeting.

The evaluation of this activity will be made by a rubric on goals and objectives, attitudes, resources, a final report on the project written by the team, a short video presentation, and a questionnaire on the topic. Furthermore, the students will be encourage to present their project to R+ Cash awards.

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