Simulation Ogden Corporation has compiled the following information on a capital expenditure proposal:

(1) The projected cash inflows are normally distributed with a mean of $30,000 and a standard deviation of $11,000.

(2) The projected cash outflows are normally distributed with a mean of $31,000 and a standard deviation of $7,000.

(3) The firm has an 11.8% cost of captial

(4) The probability distributions of cash inflows and cash outflows are not expected to change over the project's 10-year life.

a. Describe how the foregoing data can be used to develop a simulation model for finding the net present value of the project.

b. Discuss the advantages of using a simulation to evaluate the proposed project.