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Assume the company that is selling the equipment is offering the following service plan with their equipment: If the operating costs in a given year
Assume the company that is selling the equipment is offering the following service plan with their equipment: If the operating costs in a given year exceed $ they will pay for the additional costs. For example, if the operating costs in a given year are $ then they are going to give Big B $ if the costs are $ then they will give Big B $ If the operating costs turn out to be $ then nothing happens. Incorporate this adjustment in your model you will need to use the IF function rerun the simulation and answer the following questions. Include a copy of the simulation report in the files you post name this workbook Simulation results
a What is the expected NPV with the service plan?
b What is the probability of getting a negative NPV Does it improve compared to Q
c How much would you be willing to pay for a service plan like this and why?
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