Midterm Epiphany

I am ridiculously excited about the epiphany I just had while studying finance.

In capital budgeting, you determine the discount cash flows at cost of capital using the expected return of the project, which equals the Risk-free Interest Rate + Systematic Risk of the Project (Beta) x Risk Premium of Market Portfolio. You can analyze Beta to determine the risk, knowing that at 0 = the project is risk free, and at 1 = the company's risk equals the market's risk. 

Beta is also known as the slope in the regression equation... which I just learned about in statistics! Beta is a coefficient which can be analyzed through statistical methods!

What else goes in to capital budgeting? Things like depreciation, cost of goods sold, etc. Where do you determine how to account for these things? In accounting!!! Then  you have to determine things like interest rates and tax rates.  Where do those come from? Economics!!!

In case you haven't figured it out, my epiphany is that everything fits together!!!

For the first time in my schooling history, I feel like all of my classes are aligning. In theory, I knew an MBA would teach me the various aspects of business - but I didn't realize HOW MUCH everything ties together. Remember in high school, when we learned calculus and wondered, "why on earth will I ever need this?" I am happy to say that I have yet to say that about anything I've learned this semester. And with a 95% confidence interval (at Z=1.96), I should accept the null hypothesis that I will not say "why on earth will I ever need this" for the rest of my MBA.  (Hahaha, I crack myself up.)

Business school is awesome!!!!!