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Develop a simulation model in Excel for a 3-year financial analysis of total profit based on the following data and information. Sales volume in the
Develop a simulation model in Excel for a 3-year financial analysis of total profit based on the following data and information.
- Sales volume in the first year is estimated to be 100,000 units and is projected to grow at a rate that is normally distributed with a mean of 7% per year and a standard deviation of 4%.
- Unit selling price has a continuous uniform distribution between $10 and $15 in each year.
- Unit variable cost is $3 in the first year and expected to increase by an amount normally distributed with a mean of 5% per year and a standard deviation of 2%.
- Fixed cost has a discrete uniform distribution between $200,000 and $225,000 in each year.
- Perform 200 simulation trials.
- Compute the summary statistics for the 3-year undiscounted cumulative profit.
- Build a percentile table (in increments of five-percentile) for the 200 output from part a). What is the probability of making at least $2,500,000 in total undiscounted cumulative profit over the 3-year period?
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