Please consult the HBS Case Flash Memory, Inc Number 4230 (screenshots below) Should Flash undertake the project You are concerned about three inputs to the NPV calculation the size of the required working capital, the size of the cost of goods sold, and the amount to be spent on advertising for product launch In particular you are quite unsure how accurate the numbers used to compute base case NPV are To account for this uncertainty compute using a Monte Carlo simulation the standard deviation of the NPV allowing for the required working capital as a percentage of sales to be normally distributed with mean 26 15 of sales and a standard deviation of 7 5 , and cost of goods sold to be normally distributed with a mean of 79 of sales and a standard deviation of 7 5 and finally the advertising and promotion costs to be normally distributed with mean $300K and standard deviation of 50K Use at least 1000 simulations in your calculation and comment on the magnitude of the variability in NPV across simulations

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Question: Please consult the HBS Case Flash Memory, Inc. Number 4230 (screenshots below) Should Flash undertake the project? You are concerned about three inputs to the

Please consult the HBS Case "Flash Memory, Inc." Number 4230 (screenshots below)

Should Flash undertake the project?
You are concerned about three inputs to the NPV calculation: the size of the required working capital, the size of the cost of goods sold, and the amount to be spent on advertising for product launch. In particular you are quite unsure how accurate the numbers used to compute base-case NPV are. To account for this uncertainty compute using a Monte Carlo simulation the standard deviation of the NPV allowing for the required working capital as a percentage of sales to be normally distributed with mean 26.15% of sales and a standard deviation of 7.5%, and cost of goods sold to be normally distributed with a mean of 79% of sales and a standard deviation of 7.5%; and finally the advertising and promotion costs to be normally distributed with mean $300K and standard deviation of 50K. Use at least 1000 simulations in your calculation and comment on the magnitude of the variability in NPV across simulations.