1. Discuss the important differences between sensitivity analysis and scenario analysis in the risk analysis of capital budgeting and, maybe more importantly, why these tools are used by analysts. What, if anything, does Monte Carlo simulation add to the discussion of project risk?
2. Suppose payments were made at the end of each month into an ordinary annuity earning interest at the rate of 5.5%/year compounded monthly. If the future value of the annuity after 13 years is $50,000, what was the size of each payment? (Round your answer to the nearest cent.)