1.Briefly describe sensitivity analysis. What type of risk does it attempt to measure? What are its strengths and weaknesses?

2. “In a truly efficient market, stock prices would react immediately and sharply to new information, settling into a new equilibrium price.” Please explain.

3.hy is NPV considered a superior method of evaluating the cash flows from a project?

4. In the context of capital budgeting, what is an opportunity cost?