College Essays-Describe the capital asset pricing model (CAPM) and how it is used in capital budgeting decisions.
Describe the capital asset pricing model (CAPM) and how it is used in capital budgeting decisions.
You win the $20 million state lottery, and you have a choice of taking an amount of money per year for the next 20 years or a flat payment now. The flat payment that the state offers you is $9.82 million.
What discount rate is the state using?
Should you take the money or the annuity?
In terms of capital budgeting, explain the difference between risk and uncertainty.
