What are the steps to determine the impact on the net income in the specific quarters noted? How do those steps differ when calculating annual net income? How do you determine the impact on cashflows? Share a post explaining your key learning from those problems. What areas were unfamiliar and how did you strengthen your knowledge of these concepts? Share your interpretation of the concepts.

88 MULTIPLE CHOICE Question 6 Listen If f(x)= and g(x) = x²-16, then what is the value of f(g(4))? A 0 B 4 C undefined

Q2) 4. What is sensitivity analysis?

Problem 9-25 Fudge factors An oil company executive is considering investing $10.1 million in one or both of two wells: well 1 is expected to produce oil worth $3.01 million a year for 10 years; well 2 is expected to produce $2.01 million for 15 years. These are real (inflation-adjusted) cash flows. The beta for producing wells is 0.91. The market risk premium is 9%, the nominal risk-free interest rate is 7%, and expected inflation is 3%. The two wells are intended to develop a previously discovered oil field. Unfortunately there is still a 21% chance of a dry hole in each case. A dry hole means zero cash flows and a complete loss of the $10.1 million investment. Ignore taxes and make further assumptions as necessary. a. What is the correct real discount rate for cash flows from developed wells? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Real discount rate b. The oil company executive proposes to add 20 percentage points to the…