An apartment complex in West Haven, has 60 one-bedroom apartments. The monthly rate for each apartment...
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An apartment complex in West Haven, has 60 one-bedroom apartments. The monthly rate for each apartment is $1100. The operating cost for the complex is $22000 per month regardless of the number of apartments rented. There is also a variable cost of $100 for each apartment rented. Assume: . The number of apartments rented follows a normal distribution with a mean of 35 and a standard deviation of 3 . The fixed operating cost follows a uniform distribution between $17,000 and $25,000 1. First, construct a spreadsheet model to determine the profit if 38 units are rented 2. Then, based on the above-mentionedassumptions use Monte Carlo Simulation to calculate the risk that the profit will not exceed $10,000 (Simulate for 100 trials). An apartment complex in West Haven, has 60 one-bedroom apartments. The monthly rate for each apartment is $1100. The operating cost for the complex is $22000 per month regardless of the number of apartments rented. There is also a variable cost of $100 for each apartment rented. Assume: . The number of apartments rented follows a normal distribution with a mean of 35 and a standard deviation of 3 . The fixed operating cost follows a uniform distribution between $17,000 and $25,000 1. First, construct a spreadsheet model to determine the profit if 38 units are rented 2. Then, based on the above-mentionedassumptions use Monte Carlo Simulation to calculate the risk that the profit will not exceed $10,000 (Simulate for 100 trials).
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SOLUTION To construct a spreadsheet model to determine the profit if 38 units are rented you can follow these steps 1 Create a spreadsheet with the fo... View the full answer
Related Book For
Accounting Information Systems
ISBN: 978-1260153156
2nd edition
Authors: Vernon Richardson, Chengyee Chang, Rod Smith
Posted Date:
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