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Managing Capital Investment Projects
Analytical Essay # 146158
Looks at the use of the capital asset pricing model and of beta risk values to manage capital investment projects.
2,580 words (approx. 10.3 pages) |
10 sources |
APA | 2010
| 
Published on: Dec 19, 2010
Paper Summary:
This paper explains that the capital asset pricing model is used to determine which projects will generate the highest returns; whereas, beta values are used to asses the degree of risk in an investment. Next, the author relates that the important time value of money relies upon the evaluation of the discount rate, which is calculate in the capital asset pricing model. The paper demonstrates the use of beta values to determine the disparity of risk between two companies. The author includes explanatory figures and tables.Table of Contents:
The Capital Asset Pricing Model
The Disparity between the Beta Values of Two Companies
From the Paper:
"In the present business environment, a business organization has to maintain a continuous improvement program to create a sustainable competitive advantage. In order to implement these initiatives for performance improvements, business organizations implement a variety of strategies for arranging financing. One of these strategies is the selling of securities in the capital markets. The capital market model is built upon a number of assumptions the most important of which has to do with the relationship between risk and return."Sample of Sources Used:
- Bartholdy, J. & Peare, P., 2003. Unbiased estimation of expected return using CAPM. International Review of Financial Analysis, 12(1), pp.69-81.
- Brigham, E. F., & Ehrhardt, M. C., 2007. Financial Management: Theory & Practice. South western college pub.
- Carpinetti, L. C. R. & Melo, A. M. de., 2002. What to benchmark. Benchmarking: An International Journal, 9, pp.244-255.
- Climent, F. & Meneu, V., 2003. Has 1997 Asian crisis increased information flows between international markets. International Review of Economics and Finance, 12(1), pp.111-143.
- Cuthbertson, K. & Hyde, S., 2002. Excess volatility and efficiency in French and German stock markets. Economic Modeling, 9(3), pp.399-418.
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Cite this paper
APA Citation:
Managing Capital Investment Projects (2012, April 01). Retrieved May 19, 2012, from http://www.academon.com/Analytical-Essay-Managing-Capital-Investment-Projects/146158
MLA Citation:
"Managing Capital Investment Projects" 01 April 2012. Web. 19 May. 2012. <http://www.academon.com/Analytical-Essay-Managing-Capital-Investment-Projects/146158>
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Jun 08, 2008 I have an MBA from National University of Singapore and a BBA from University of Dhaka, Bangladesh. In MBA, my major was in operations management. However I covered a wide variety of subjects in marketing, finance and accounting. My paper on the analysis of financial statements was published. I enrolled in National University of Singapore because I was offered a full scholarship from the Asian Development Bank, one of eight such awards given every year. As part of an exchange program, I also spent one quarter in University of Washington, Seattle. There I covered four subjects in marketing, statistics, operations and IT. I have also worked in a variety of professional roles that allowed to me apply my academic learnings to real life.
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