Simulation Analysis and Probability
Not what you're looking for?
A simulation model similar to the one described in this chapter has been constructed by The Great Basin Corporation to evaluate the largest of its new investment proposals. After many iterations of the model, Great Basin's management has arrived at an expected net present value for Project A of $1.0 million. The standard deviation of the net present value has been estimated from the simulation model results to be $0.8 million.
a. What is the probability that the project will have a negative net present value?
b. What is the probability that the project will have a net present value greater than $2.2 million?
Purchase this Solution
Solution Summary
The expert determines the probability that a project will have a negative net present value.
Purchase this Solution
Free BrainMass Quizzes
Situational Leadership
This quiz will help you better understand Situational Leadership and its theories.
Understanding the Accounting Equation
These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.
Organizational Leadership Quiz
This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.
Production and cost theory
Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.
Cost Concepts: Analyzing Costs in Managerial Accounting
This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.