LBO VALUATION USING SIMULATION This problem utilizes information from Problem 9 and requires that the LBO valuation model be constructed. Randy was happy with the anticipated results from the acquisition of Flanders Inc., but he wanted to do some exploratory analysis of the risks involved in the acquisition so that he might be able to anticipate the risks inherent in the investment. He planned to construct a spreadsheet model using the industry-standard LBO valuation model (using information from Problem 9) and then identify the key sources of risk in the model, constructing what he felt were reasonable characterizations of the probability distributions for each of these variables. Specifically, Randy decided upon the following variables (value drivers) and distributional characterizations: