uncertain and the manager estimates that the actual cash flow will be normally distributed with a mean of 9 000 and a standard deviation of 400 The discount rate is set at 5 and assumed to remain constant over the next five years The company evaluates capital investments using net present value How risky is this investment Develop and run a simulation model to answer this question using 50 trials Click the icon to view a sample of 50 simulation trial results is un Say the values of the mean of the cash flow distribution the standard deviation of the cash flow distribution the initial investment and the discount rate are entered in cells B3 B4 B5 and B6 respectively Then for the Monte Carlo simulation the cash flow for an individual year is randomly generated using the Excel formula NORM INV RAND B B If the randomly generated cash flows for the five years are in cells B9 C9 D9 E9 and F9 then the Excel formula for the net present value is B NPV BB Type whole numbers Simulation Results 89 65 1 579 93 174 45 717 02 784 65 3 057 49 1 786 30 1 781 27 1 180 61 2 604 18 901 40 2 344 31 685 61 1 899 89 1 205 22 3 069 45 1 195 65 774 76 68 69 913 51 1 552 81 1 966 66 1 827 60 1 261 51 131 44 695 02 827 36 253 69 954 05 714 76 942 82 818 66 413 88 960 97 1 228 96 433 41 2 041 97 1 349 45 458 31 14 83 697 51 1 071 15 1 512 50 264 67 1 708 88 X