Suppose a manager has already estimated a projects cash flows, calculated its NPV, and done a sensitivity
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Suppose a manager has already estimated a project’s cash flows, calculated its NPV, and done a sensitivity analysis like the one shown in Table. List the additional steps required to carry out a Monte Carlo simulation of project cashflows.
Monte Carlo simulationMonte Carlo simulation is a technique used to understand the impact of risk and uncertainty in financial, project management, cost, and other forecasting models. A Monte Carlo simulator helps one visualize most or all of the potential outcomes to...
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Principles of Corporate Finance
ISBN: 978-0077404895
10th Edition
Authors: Richard A. Brealey, Stewart C. Myers, Franklin Allen
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