Now go to the 'PQR with MC simulation' tab. In it you will find a fully...

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Now go to the 'PQR with MC simulation' tab. In it you will find a fully functioning MC simulation model for PQR Corp. (NOTE: If you open this workbook without first opening @RISK you'll see a lot of #NAME errers.) You also will find 3 histograms in this worksheet-one for the total additional funds needed over the next 5 years, one for EBITDA in 2020, and one for PQR's total intrinsic (DCF) value. (I encourage you to take the model to the biz school's computer lab and run it.) Use either my or your histograms to answer questions 2-4. b) PQR has a bank line of credit for $400 million. The bank will not expand this line, nor can PQR borrow from anyone else on reasonable terms. What is the likelihood PQR will need more funds before 2022? c) What is PQR's cash-flow-at-risk in 2020 at the 95th percentile (the left 5% tail)? d) What is PQR's value-at-risk at the 95% level (left 5% tail)? e) In what year(s) is PQR likely to exceed its credit limit? Now go to the 'PQR with MC simulation' tab. In it you will find a fully functioning MC simulation model for PQR Corp. (NOTE: If you open this workbook without first opening @RISK you'll see a lot of #NAME errers.) You also will find 3 histograms in this worksheet-one for the total additional funds needed over the next 5 years, one for EBITDA in 2020, and one for PQR's total intrinsic (DCF) value. (I encourage you to take the model to the biz school's computer lab and run it.) Use either my or your histograms to answer questions 2-4. b) PQR has a bank line of credit for $400 million. The bank will not expand this line, nor can PQR borrow from anyone else on reasonable terms. What is the likelihood PQR will need more funds before 2022? c) What is PQR's cash-flow-at-risk in 2020 at the 95th percentile (the left 5% tail)? d) What is PQR's value-at-risk at the 95% level (left 5% tail)? e) In what year(s) is PQR likely to exceed its credit limit?

Answer rating: 100% (QA)

b To determine the likelihood PQR will need more funds before 2022 you would typically look at the h... View the full answer