Question

In: Finance

which of the gollwing methods result in a probability distribution of project NPV outvomrs based on...

which of the gollwing methods result in a probability distribution of project NPV outvomrs based on probability distributiond of project iputs?
a. simuation analysis
b. sensitiy anssysis
c, simulation and sensativity analyisis
d. scenario analysis
e. scenario and sensativity analysis

Solutions

Expert Solution

Typically Monet Carlo simulation is employed to ascertain the probability distribution of Project NPV outcomes based on probability distribution of inputs. However, in fields like economics, Probabilistic sensitivity analysis is carried out to quantify the level of outcome based on the change in inputs.

Answer is c) Simulation and Sensitivity analysis

jeff jeffy answered 2 years ago
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