Why time value of money is important to capital budgeting


Assignment

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.

In a report of 3 pages, complete the following:

i. Discuss capital budgeting and time value of money (TVM).

ii. Explain why time value of money is important to capital budgeting.

iii. Analyze potential financial investment risks, and explore the relevance of the capital asset pricing model (CAPM) in determining portfolio risks.

Format your assignment according to the following formatting requirements:

(1) The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.

(2) The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.

(3) Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.

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Corporate Finance: Why time value of money is important to capital budgeting
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