Trying to practice for an upcoming in-class quiz-- below are some of those practice questions the professor suggested we practice on:

1) Currently, the maintenance expense for all of the firm's production facilities varies based on the utilization of their production facilities (increase in use leads to an increase in maintenance expense and a decrease in use leads to a decrease in maintenance expense).The firm is considering entering into a contract with a maintenance firm to pay a fixed monthly amount for the maintenance for all of their production facilities over the next five years.Assuming maintenance expense is a significant portion of the firm's total operating expenses, then how would entering this fixed maintenance expense agreement impact the level of systematic risk for this firm (increase, decrease, or no change).Explain!

2)What is sensitivity analysis?How does applying this tool help make the decision to invest or not?

3) When analyzing the firm's alternative investment opportunities, why is it useful to apply Monte Carlo Simulation?

Please help! Thank you! :)