Question: please solve showing all work like the practice problem that is listed Introduction to Proiect Risk analysis (Frasus on stand-alone nell, not portfolio no) Simulation

please solve showing all work like the practice problem that is listed
please solve showing all work like the practice problem that is listed
Introduction to Proiect Risk analysis (Frasus on stand-alone nell, not portfolio no)
Simulation analysis - A financial planning tool to model some event Sensitivity

Introduction to Proiect Risk analysis (Frasus on stand-alone nell, not portfolio no) Simulation analysis - A financial planning tool to model some event Sensitivity analysis - Changing key variables one at time and observing the changes in NPV. (The steeper the NPV profile graph, the riskier the project) Scenario analysis - Changing all key variables at one time to produce different states (ie, worst and best case scenarios, etc). With probabilities - can compute expected NPVs, standard deviations and coefficient of variation to compare with other projects NPV - NPVP NPV Oxw - (NPV, - NPV) cv0v/ NPV (Note that assigning the probabilities to the outcomes above is difficult and largely subjective) Monte Carlo analysis - computer simulations of thousands of scenarios 25 Assuming the distribution is normal, we can apply statistical techniques to estimate the probability of certain NPV values EXAMPLE: Suppose the expected NPV of the RPM project is $30,135 and the standard deviation is $69.67What is the probability that the NPV will be less thap 0? 21 ..1684 2-0-30)/4,275 -.4% P(485)=,1082 sos-.132, 13 tee is 95 93.17% probability the NPV 20, 66319,0 -S-PL.415) 02 104 1664.64.12 EXAMPLE: Red Line Products is considering purchasing new equipment. The project has an expected NPV of $250,000 and a standard deviation of 100,000. What is the probability the project will have an NPV

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