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A variable V0 depends on four input variables, FCFF, g1, g2, and WACC. The four input variables are stochastic and their probability distributions are as

A variable V0 depends on four input variables, FCFF, g1, g2, and WACC.

The four input variables are stochastic and their probability distributions are as folllows:

FCFF ~ Triangular distribution (100, 125, 150). You may use 125 as static value.

g1 ~ Trangular distribution (10%,13%,16%). You may use 13% as static value.

g2 ~ Trangular distribution (-1%,2%,5%). You may use 2% as static value.

WACC ~ Uniform distribution (8%,17%). You may use 12% as static value.

1. Run the simulation for V with 10,000 iterations. Using the tornado graph, identify the value drivers with the most impact and the least impact on V.

2. Find: the mean value for V and compute the 95% confidence interval.

3. Find the probability that V > 1500.

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