Question
Develop a Monte Carlo simulation in Excel with 50 iterations and 10 years of returns. A company wants to launch a new product line. The
Develop a Monte Carlo simulation in Excel with 50 iterations and 10 years of returns.
A company wants to launch a new product line. The investment in facilities is expected to be between $1,000,000 and $2,000,000 with a uniform distribution. The initial marketing campaign is expected to be normally distributed with a mean cost of $500,000 and a standard deviation of $100,000. The annual profit/return is expected to be normally distributed with a mean of $250,000 and a standard deviation of $100,000
What is the average IRR?
What is the average NPV at 10%?
For what percent of the iterations is the total cash flow negative?
For what percent of the iterations is the NPV at 10% negative?
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Average IRR 245 Average NPV at 10 492392 Percentage of Total Cash Flow Negative 40 ...Get Instant Access to Expert-Tailored Solutions
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Probability and Random Processes With Applications to Signal Processing and Communications
Authors: Scott Miller, Donald Childers
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123869811, 978-0121726515, 121726517, 978-0130200716, 978-0123869814
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