Question: Briefly Explain clearly and concisely as possible When evaluating a capital investment decision, what is the difference between a sensitivity analysis and a scenario analysis

Briefly Explain clearly and concisely as possible

  1. When evaluating a capital investment decision, what is the difference between a sensitivity analysis and a scenario analysis? Why are these types of analyses necessary?

2. Give two reasons why a company's cost of equity is always greater than its cost of debt. (Hint: one has to do with risk, and the other with taxes.

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