Corporate Finance
Question 1: Management of a company could use Sensitivity and Scenario Analysis in their 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 Analysis
b. Scenario Analysis
Question 2: Explain and identify similarities and differences between the following two models. (1000 words)
a. Capital Asset Pricing Model
b. Capital Market Line
PS. -Please use related graphs, table, and equation with explanation and sources
INSTRUCTIONS
- Use Harvard style
-Deliver by Monday 9th, by 4pm
Articles-
1. Capital Market Line Based on Efficient Frontier of Portfolio with Borrowing and Lending Rate by Ming-Chang Lee and Li-Er Su.
2. The Capital Asset Pricing Model by Andre F. Perold.
3. CAPITAL BUDGETING: THE ROMANIAN UNIVERSITY PROFESSORS' POINTS OF VIEW by V. DRAGOTA, L. TATU, D. PELE, N. VINTILA, AND A. SEMENESCU.
4. An Introductory Application of Monte Carlo Simulatoin in Capital Budgeting Analysis by Nont Dhiensiri and Nauzer Balsara.