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In: Economics

"A company's present worth (PW) is given by the following equation: PW = -$180062 + 2.199X(Y-15)...

"A company's present worth (PW) is given by the following equation: PW = -$180062 + 2.199X(Y-15) + 36560S, where X is the demand, Y is the unit price, and S is a factor that determines the salvage value. All three of these are random variables. Use simulation, like SIPMath, to simulate the present worth of BMC with 100,000 trials.
Set X as a normal distribution with mean 2292 and standard deviation 114. Set Y as a trianglular distribution with the minimum equal to 49, the most likely equal to 51, and the maximum equal to 55. Set S as a uniform distribution (between 0 and 1, there are no parameters).
After simulating 100,000 trials, calculate the probability that the present worth is less than 0. Express your answer as a decimal between 0 and 1."

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Expert Solution

Rahul Sunny answered 2 years ago
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