An investment of \(\$ 5,000\) is expected to generate the probabilistic returns shown in the table below over its 3 -year life. Assume the annual cash flows are independent and that the distribution of present worth is normal.

For the following question, determine an analytical solution using a MARR of 15\%:

a. Determine the probability that the present worth is negative.
For the following questions, determine a simulation solution using @RISK:

b. Using a Latin hypercube simulation with 10,000 iterations, estimate the probability that the present worth is negative.

c. Using a Monte Carlo simulation with 10,000 iterations, estimate the probability that the present worth is negative.

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EOY - 1 Annual Return $2,500 with probability 0.4 or $1,800 with probability 0.6 2 $3,000 with probability 0.5 or $2,000 with probability 0.5 3 $3,500 with probability 0.7 or $2,500 with probability 0.3