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Question #9 Monte Carlo Simulation The CFO of a regional manufacturer has been utilizing the attached Monte Carlo simulation model (see excel file titled a Fina.Q9"greentaba#9Monte Carlo! and has been happy with its performance over the last couple years. Key performance parameters are as follows: Production Growth Rate: 15% Unit Sale Price: $1,000/unit Raw Material & Labor Cost: $700.00/unit MARR 1896 She believes the Monte Carlo forecasts are stable as designed (see blue tab titled "#9 NPV Original Output"). The chart shows a high probability for profits (-80%), and for strong profits, greater than $1,000,000 (> 50%). Recent economic events have caused the CEO to revise two key parameters. Revise Base Production Growth Rate down to 10% (from 1596) Revise MARR up to 20% (from 1896) (4) A. In 25 words or less each, describe the individual impacts upon NPV you expect to see as a result of 1" Going to a Base Production Growth Rate of 1096 (from 1596) 2. Adjusting MARR to 20% (from 1896) (3) B. In 25 words or less each, based upon the changes made in Part A, what type of market changes is the CEO likely expecting? Specifically address why would the CEO make each of the changes; be VERY specific. (3) C. Implement the adjustments directed by the CEO and rerun the Monte Carlo simulations utilizing the Yellow tab titled "#9 Revised NPV Output". Update the chart with the new, sorted values. Compare and contrast the two NPV charts, before and after the adjustments. 1. In 50 words or less, provide a summary that addresses at least THREE (3) key observations. (2) Extra Credit: As the analyst brought onboard, you recognize that market conditions provide an environment where raw materials may be more economically sourced, more often (+10% more often), than previously forecasted. Which cell(s) would you have to adjust in the model to reflect this change? Note: Iam looking for you to cite particular cell(s) in your "Uncertainty Table" in Tab titled "9 Monte Carlo" that will need to be revised (ie. C45, Exx, etc.). Question #9 Monte Carlo Simulation The CFO of a regional manufacturer has been utilizing the attached Monte Carlo simulation model (see excel file titled a Fina.Q9"greentaba#9Monte Carlo! and has been happy with its performance over the last couple years. Key performance parameters are as follows: Production Growth Rate: 15% Unit Sale Price: $1,000/unit Raw Material & Labor Cost: $700.00/unit MARR 1896 She believes the Monte Carlo forecasts are stable as designed (see blue tab titled "#9 NPV Original Output"). The chart shows a high probability for profits (-80%), and for strong profits, greater than $1,000,000 (> 50%). Recent economic events have caused the CEO to revise two key parameters. Revise Base Production Growth Rate down to 10% (from 1596) Revise MARR up to 20% (from 1896) (4) A. In 25 words or less each, describe the individual impacts upon NPV you expect to see as a result of 1" Going to a Base Production Growth Rate of 1096 (from 1596) 2. Adjusting MARR to 20% (from 1896) (3) B. In 25 words or less each, based upon the changes made in Part A, what type of market changes is the CEO likely expecting? Specifically address why would the CEO make each of the changes; be VERY specific. (3) C. Implement the adjustments directed by the CEO and rerun the Monte Carlo simulations utilizing the Yellow tab titled "#9 Revised NPV Output". Update the chart with the new, sorted values. Compare and contrast the two NPV charts, before and after the adjustments. 1. In 50 words or less, provide a summary that addresses at least THREE (3) key observations. (2) Extra Credit: As the analyst brought onboard, you recognize that market conditions provide an environment where raw materials may be more economically sourced, more often (+10% more often), than previously forecasted. Which cell(s) would you have to adjust in the model to reflect this change? Note: Iam looking for you to cite particular cell(s) in your "Uncertainty Table" in Tab titled "9 Monte Carlo" that will need to be revised (ie. C45, Exx, etc.)