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Monte Carlo simulation: Can be used to estimate a project's market risk, but cannot be used to determine its net present value (NPV). Uses the
Monte Carlo simulation:
Can be used to estimate a project's market risk, but cannot be used to determine its net present value (NPV). | ||
Uses the probability distributions of variables as inputs to estimate the project's net present value (NPV). | ||
Produces an expected net present value (NPV), an internal rate of return (IRR), and a measure of the projects risk for different scenarios. | ||
Calculates net present value (NPV) for a change in one key variable. |
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