A company has improved its anti-virus program and has released a new version. Assume there is a 0.6 probability that the users of this anti-virus will upgrade the version in any particular year
That is, the upgrade year of the user is a geometric random variable. The revenue generated from the upgrade (when it occurs) follows a normal distribution with a mean of $80,000 and a standard deviation of $22,000.
a. Complete a simulation model that analyzes the net present value of the revenue from the user upgrade. Use an annual discount rate of 8 percent.
b. What is the average net present value earned by the company?
c. What is the standard deviation of net present value?
Answer is a.
You might also like to view...
Which of the following is a type of audit opinion that a firm would usually prefer?
a. Uqualified opinion b. Qualified opinion c. Adverse opinion d. Clear opinion e. None of the answers are correct.
______ is the ability of a company to deliver products to customers without loss or damage.
a. Order fill rate b. Delivery safety c. Order delivery completion d. In-stock probability
Which of the following is not a remedy of the buyer?
a. The buyer has the right of cover and to receive damages. b. The buyer has the right to stop delivery of the goods. c. The buyer may have the right to obtain specific performance. d. The buyer may have the right to recover incidental and consequential damages.
________ are the two basic leader behaviors identified by the behavior model of leadership.
A. Rewarding and coercing B. Instrumental and terminal C. Task-structure and task-orientation D. Intrinsic and extrinsic E. Consideration and initiating structure