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Analysing the dependence of a variable on other variables

  1. Aug 22, 2011 #1

    I am trying to analyze the sensitivity of a variable to three other variables. Please see the attached document explaining the relationship. The document shows how I reached to Eqn 1. It is nothing but a DCF analysis for a one-year period.

    I wish to understand how the variables d, g, and T influence the variable C. I wish to know by how much C changes when d or g or T move increases or decreases by 10%.

    I kind of did some sensitivity analysis in Excel by changing the values of d, g, and T, but I feel that I still don’t have the whole picturel.

    In eqn 2, 3, and 4, I tried to find the derivatives of C wrt to d, g, and T, but they are more confusing than eqn 1. I am not able to interpret the equations.

    Also I have the following questions.

    Q1. Is this the right way of analyzing such a relationship?
    Q2. Are there any other methods for doing this kind of analysis?


    Attached Files:

  2. jcsd
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