Explain how sensitivity analysis is related to constraints

Assignment Help Financial Management

Reference no: EM131969391

1. Explain how sensitivity analysis is related to the constraints. Provide an example.

2. What is the annual payment on a 20-year fully amortized loan of $500,000 with an interest rate of 5%?

3. You bought one of Great White Shark Repellant Co.’s 8 percent coupon bonds one year ago for $760. These bonds make annual payments and mature 12 years from now. Suppose you decide to sell your bonds today, when the required return on the bonds is 9 percent. If the inflation rate was 3.4 percent over the past year, what was your total real return on investment?

Reference no: EM131969391

Questions Cloud

Balance sheet relationships to sales remain unchanged : Assuming Income statement and balance sheet relationships to sales remain unchanged, what is A's external funding need for 2010

What was your total real return on investment : If the inflation rate was 3.6 percent over the past year, what was your total real return on investment?

Ignore any influence of taxes and inflation : The City of Lake Woebegone consumes approximately 10,000,000 gallons of treated water per year. Ignore any influence of taxes and inflation.

Accounting standards allow for flexibility in interpretation : After computing the current period’s basic and diluted EPS figures, Do the accounting standards allow for this flexibility in interpretation?

Explain how sensitivity analysis is related to constraints : Explain how sensitivity analysis is related to the constraints. Provide an example.

What was the firm cash flow from assets : What was the firm's cash flow to creditors during 2016? What was the firm’s cash flow from assets during 2016?

What is the best estimate of these bonds remaining life : What is the best estimate of these bonds' remaining life?

What is the payment amount with balloon payment : Consider a loan for $300,000 with 20 annual payments and an interest rate of 5%. What is the payment amount with a balloon payment of $60,000?

Direct financial market and the indirect financial market : What is the difference between the direct financial market and the indirect financial market?

User Account

All Pages