Assume that sale price follows a lognormal distribution with mean of $48 and standard deviation of $4.80
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Assume that sale price follows a lognormal distribution with mean of $48 and standard deviation of $4.80 and the variable production costs follow a lognormal distribution with mean of $20 and standard deviation of $2. Also, assume that the required rate of return follows a uniform distribution between 18% and 30%. What is the expected NPV? What is the probability that the NPV is less than zero? What variable is the NPV most sensitive to?
Related Book For
Applied Statistics and Probability for Engineers
ISBN: 978-1118539712
6th edition
Authors: Douglas C. Montgomery, George C. Runger
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