Problem:
Lets say that the IT department of your company has begun to appreciate that its projects do not exist in a business vacuum. That is, your company must also commit resources to operations, shareholder returns, and non-IT projects for short- and long-term durations. It is therefore necessary to assess project risks from a financial standpoint before committing to a project.
Discuss capital budgeting and time value of money (TVM). can you explain why time value of money is important to capital budgeting. Analyze potential financial investment risks, and explore the relevance of the capital asset pricing model (CAPM) in determining portfolio risks.