Setup and conduct a Monte Carlo analysis for the following assumptions.

Costs in year 0 = mean of $1000, follows a uniform distribution (ranging from $550 to $1450) Benefits in years 1-5 = mean $300, follows a normal distribution with SD=$50 Discount rate = 4%

a. Conduct a baseline, fixed analysis (non-random/non-Monte Carlo) using the mean values. What is the NPV? Should we do the project?

b. Now conduct a Monte Carlo analysis using software* with 1000 draws (simulations). Report all information: i. Average NPV from 1000 draws ii. Minimum iii. Maximum iv. SD of your 1000 draws v. "Low likely" range (your average minus 1.96*the SD) vi. "High likely" range (your average plus 1.96*the SD) vii. # of times out of 1000 that your NPV is negative viii. Probability of a positive NPV

c. Include a histogram** of your results. What does the height of the bars represent? (Bonus if you can label the "bins" meaningfully along the X-axis.)