Consider the data in problem 2 and perform a scenario analysis using the percentages of change for the same uncertain variables and the probabilities for each scenario given in the following table:
a) Determine the payback period, discounted payback period, NPV, PI, IRR, and MIRR of this project under each scenario.
b) Determine the expected NPV, PI, and IRR, and the corresponding standard deviation, coefficient of variation, and the probability of a negative NPV, a PI equal to 1, and an IRR equal to the firm’s IRR.
c) Perform a Monte Carlo simulation with 1,000 trials to determine the expected NPV. Also determine the standard deviation of the expected NPV. The uncertain variables and their probability distributions are given in the following table:
d) Create a histogram using the Histogram chart type, showing the probability distribution of NPV.
e) Using the output of the simulation, determine the probability that the NPV will be less than or equal to zero. Compare your results with those of part (a).
You might also like to view...
Following the February bank reconciliation, the accountant made the following entry in the journal of Kincaid Company:Accounts receivable150 Cash 150 Which of the following is a possible explanation for this journal entry?
A. The collection of an account receivable by the bank that has been deposited in Kincaid's account. B. The bank statement included a debit memo advising of a customer's NSF check that was returned C. The collection of an account receivable by Kincaid that is part of a deposit in transit D. Bank charges owed by Kincaid to the bank.
_____ is determined by subtracting the costs associated with both the debt and the equity that the firm uses from its after-tax operating income?
A. A firm's price earnings ratio (P/E) B. A firm's expected capital gains yield C. A firm's intrinsic value of stock D. A firm's nonconstant growth of stock E. A firm's economic value added (EVA)
In assessing external technological trends, benchmarking and scanning are similar in that both are concerned with
A) what is being done currently. B) what can be done and is being developed. C) key technologies. D) pacing technologies. E) obtaining competitor's secrets.
Operational customer relationship management system refers to the systems used for providing effective and efficient communication with the customer from the entire organization
Indicate whether the statement is true or false