Question
Assume that sale price follows a lognormal distribution with mean of $48 and standard deviation of $4.80 and the variable production costs follow a lognormal
Assume that sale price follows a lognormal distribution with mean of $48 and standard deviation of $4.80 and the variable production costs follow a lognormal distribution with mean of $20 and standard deviation of $2. Also, assume that the required rate of return follows a uniform distribution between 18% and 30%. What is the expected NPV? What is the probability that the NPV is less than zero? What variable is the NPV most sensitive to?
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Applied Statistics And Probability For Engineers
Authors: Douglas C. Montgomery, George C. Runger
6th Edition
1118539710, 978-1118539712
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