Monte Carlo simulation begins with a model of the firms cash flows, based on both the interactions

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Monte Carlo simulation begins with a model of the firm’s cash flows, based on both the interactions between different variables and the movement of each individual variable over time. Random sampling generates a distribution of these cash flows for each period, leading to a net present value calculation. LO.1

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Corporate Finance

ISBN: 9780073105901

8th Edition

Authors: Jeffrey Jaffe, Bradford D Jordan

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