Sensitivity and Scenario Analysis
Question1. Management of a company could use Sensitivity and Scenario analysis in their corporate decision makings. How their decision making could be related to capital budgeting techniques such as, Internal Rate of Return, Net Present Value etc. Explain the following concepts in relation to Capital Budgeting Techniques. (1000 words)a. Sensitivity Analysisb. Scenario Analysis Question2. Explain and identify similarities and differences between the following two models. (1000 words)a. Capital Asset Pricing Model.b. Capital Market Line.