Question 1

In a forecast chart provided by Crystal Ball for the cumulative net profit of a particular year,you intend to find the chances that the forecast value will show a cumulative profit in that particular year.In this scenario,you should ________.
A)enter the number 0 into the left range box of the forecast chart and press the enter key
B)enter the number 0 in the right range box of the forecast chart and press the enter key
C)first anchor the right grabber at infinity and then enter 0 in the Certainty box
D)first anchor the left grabber at infinity and then enter 0 in the Certainty box

Accepted Answer

To find the chances of a cumulative profit, you should set the left range to 0, which represents the break-even point, and then calculate the probability of the forecast value being greater than 0.

Question 2

In a forecast chart provided by Crystal Ball,a certainty level is ________.
A)a probability interval that states the probability of the forecast falling within the specified range of the grabbers
B)the number of trials displayed on the forecast chart
C)the number of trials specified in the Trials Tab contained in the Run Preferences item of the Run group
D)a number that specifies the count of assumptions defined before running the simulation

Accepted Answer

A certainty level in a forecast chart provided by Crystal Ball is a probability interval that states the probability of the forecast falling within the specified range of the grabbers.

Question 3

An individual using Crystal Ball can choose to use the same sequence of random numbers for generating the random variates in the assumption cells.The above mentioned function can be found in the ________.
A)Sampling Tab in the Run Preferences item
B)Custom distribution from the Assumptions item
C)Define Decision option on the main ribbon
D)Define Forecast option on the main ribbon

Accepted Answer

The option to use the same sequence of random numbers for generating random variates can be found under the Sampling tab in the Run Preferences item. This allows for consistent results when running multiple simulations with the same assumptions. The other options listed do not offer this specific function.

Question 4

For the below given data,Reuben wanted to accomplish a Monte Carlo simulation to study the effect of variation in unit variable cost on the final decision.While using the data table function in Excel,which cell should he reference to in the Column Input Cell field of the Data Table dialog? 
A)He can enter any cell reference that has a pre-defined formula in it.
B)He should enter the cell reference that contains the demand volume.
C)He should enter the cell reference that contains the "if formula."
D)He can enter any blank cell in the spreadsheet.

Accepted Answer

The answer of For the below given data,Reuben wanted to...

Question 5

In a forecast chart provided by Crystal Ball,you intend to find the percentage of risk that the forecast over the specified period of time will not be positive.In this scenario,you should ________.
A)enter the number 0 in the left range box of the forecast chart and press the enter key
B)enter the number 0 in the right range box of the forecast chart and press the enter key
C)first anchor the right grabber at infinity and then enter 0 in the Certainty box
D)first anchor the left grabber at infinity and then enter 0 in the Certainty box

Accepted Answer

To find the percentage of risk that the forecast will not be positive, you should enter 0 in the right range box, which sets the upper limit of the range to 0, capturing all negative values.

Question 6

In a forecast chart provided by Crystal Ball,you intend to find the probability of a positive forecast value.In this scenario,you should ________.
A)enter the number 0 into the left range box of the forecast chart and press the enter key
B)enter the number 0 in the right range box of the forecast chart and press the enter key
C)first anchor the right grabber at infinity and then enter 0 in the Certainty box
D)first anchor the left grabber at infinity and then enter 0 in the Certainty box

Accepted Answer

CTo find the probability of a positive forecast value in a Crystal Ball forecast chart, you should enter the number 0 into the left range box (A) because this action sets the minimum value of interest to 0, effectively filtering for positive values. Additionally, anchoring the right grabber at infinity and then entering 0 in the Certainty box (C) is another method to calculate the probability of obtaining a value greater than 0, as it sets the range of interest from 0 to infinity.

Question 7

Use the data shown below to answer the following question(s).
Captain Jack Automobiles launched a new car and tabulated the below data for the new launch.  The project manager identified the following distributions and parameters for these variables:
Market size: normal with a mean of 2,000,000 units and a standard deviation of 400,000 units
R&D costs: uniform between $639,000,000 and $781,000,000
Test Drives: lognormal with mean of $160,000,000 and standard deviation $16,000,000
Annual market growth factor: triangular with minimum = 2%,maximum = 6%,and most likely = 3%
Annual market share growth rate: triangular with minimum = 15%,maximum = 25%,and most likely = 20%
Use 5,000 trials to generate the simulation model using Crystal Ball.
-The individual using Crystal Ball to simulate the given data should treat the cell containing the value of market size as a(n)________.
A)forecast
B)decision
C)assumption
D)run preference

Accepted Answer

In Crystal Ball, a cell containing the value of market size should be treated as an "assumption." This is because assumptions in Crystal Ball are inputs or variables that are subject to uncertainty and are used to drive the simulation model, reflecting the uncertain nature of market size estimations.

Question 8

Use the data shown below to answer the following question(s).
Captain Jack Automobiles launched a new car and tabulated the below data for the new launch.  The project manager identified the following distributions and parameters for these variables:
Market size: normal with a mean of 2,000,000 units and a standard deviation of 400,000 units
R&D costs: uniform between $639,000,000 and $781,000,000
Test Drives: lognormal with mean of $160,000,000 and standard deviation $16,000,000
Annual market growth factor: triangular with minimum = 2%,maximum = 6%,and most likely = 3%
Annual market share growth rate: triangular with minimum = 15%,maximum = 25%,and most likely = 20%
Use 5,000 trials to generate the simulation model using Crystal Ball.
-In the NPV forecast chart generated after running the simulation,you enter the number 0 in the left range box of the forecast chart and press the enter key.What exactly is the result of the above action?
A)It determines the percentage of risk that the NPV over the five years will not be positive.
B)It determines the probability of a positive NPV value.
C)It determines the cumulative profit over the five year range.
D)It determines the number of trials shown in the NPV forecast chart.

Accepted Answer

Entering 0 in the left range box of the forecast chart and pressing the enter key will determine the probability of a positive NPV value. This means it will show the percentage of simulations where the NPV is positive, giving an idea of the likelihood of profitability in the project.

Question 9

Use the data shown below to answer the following question(s).
Captain Jack Automobiles launched a new car and tabulated the below data for the new launch.  The project manager identified the following distributions and parameters for these variables:
Market size: normal with a mean of 2,000,000 units and a standard deviation of 400,000 units
R&D costs: uniform between $639,000,000 and $781,000,000
Test Drives: lognormal with mean of $160,000,000 and standard deviation $16,000,000
Annual market growth factor: triangular with minimum = 2%,maximum = 6%,and most likely = 3%
Annual market share growth rate: triangular with minimum = 15%,maximum = 25%,and most likely = 20%
Use 5,000 trials to generate the simulation model using Crystal Ball.
-In the NPV forecast chart generated after running the simulation,you enter the number 0 in the right range box of the forecast chart and press the enter key.What exactly is the result of the above action?
A)The percentage of risk that the NPV over the five years will not be positive is determined.
B)The cumulative profit over the five year range is determined.
C)It determines the number of trials to be specified in the Run Preferences item of the Run group.
D)It determines the number of trials shown in the NPV forecast chart.

Accepted Answer

Entering 0 in the right range box of the NPV forecast chart and pressing enter will show the percentage of simulations where the Net Present Value (NPV) is less than or equal to zero, effectively indicating the risk of not achieving a positive NPV over the specified period.

Question 10

________ is the probability of occurrence of an undesirable outcome.
A)Simulation
B)Risk
C)A certainty level
D)Run

Accepted Answer

The answer of ________ is the probability of occurrence of...

Question 11

The Sampling tab of Crystal Ball is useful when you wish to ________.
A)prescreen the variables in order to determine which variables are the most important candidates to define as assumptions before building a simulation model
B)use the correlation coefficients in order to rearrange the generated random variates to produce the desired correlations
C)define the assumptions for the variables in the data set
D)define a controllable variable in your model and compare results for the same assumption values

Accepted Answer

The answer of The Sampling tab of Crystal Ball is...

Question 12

Use the data shown below to answer the following question(s).
Captain Jack Automobiles launched a new car and tabulated the below data for the new launch.  The project manager identified the following distributions and parameters for these variables:
Market size: normal with a mean of 2,000,000 units and a standard deviation of 400,000 units
R&D costs: uniform between $639,000,000 and $781,000,000
Test Drives: lognormal with mean of $160,000,000 and standard deviation $16,000,000
Annual market growth factor: triangular with minimum = 2%,maximum = 6%,and most likely = 3%
Annual market share growth rate: triangular with minimum = 15%,maximum = 25%,and most likely = 20%
Use 5,000 trials to generate the simulation model using Crystal Ball.
-The NPV to be generated from the data given above is called a(n)________.
A)decision cell
B)assumption cell
C)bootstrap cell
D)forecast cell

Accepted Answer

NPV (Net Present Value) is a forecast that estimates the future cash flows generated by a project after accounting for the initial investment, opportunity costs, and other relevant factors. Therefore, the NPV is a forecast cell.

Question 13

Which of the following contains the Trials Tab that allows an individual to choose the number of times that Crystal Ball generates assumptions for the assumption cells in the model and recalculates the entire spreadsheet?
A)the Correlation matrix in the More Tools group
B)the Run preferences item from the Run group
C)the Custom item from the Assumptions group
D)the Cell Preferences tab on the main ribbon

Accepted Answer

The Trials Tab can be found in the Run preferences item from the Run group. It allows the user to choose the number of times that Crystal Ball generates assumptions for the assumption cells in the model and recalculates the entire spreadsheet. The other options do not contain this specific feature.

Question 14

Latin Hypercube sampling differs from Monte Carlo Sampling in that Latin Hypercube sampling ________.
A)selects random variates independently over the entire range of possible values
B)is a part of the Crystal Ball suite
C)is more representative of reality than Monte Carlo sampling
D)results in a more even distribution of forecast values than Monte Carlo sampling

Accepted Answer

Latin Hypercube sampling divides the possible range of values for each variable into equally probable intervals and samples randomly within each interval, resulting in a more even distribution of forecast values. Monte Carlo Sampling selects random variates independently over the entire range of possible values, but this may lead to gaps or clustering of samples. While Latin Hypercube sampling may be more efficient than Monte Carlo sampling, it is not necessarily more representative of reality. It is not a part of the Crystal Ball suite in particular.

Question 15

In Crystal Ball,uncertain inputs are called ________.
A)assumptions
B)decisions
C)forecasts
D)run preferences

Accepted Answer

In Crystal Ball, unclear or uncertain inputs are referred to as assumptions.

Question 16

What is Monte Carlo simulation?
A)It is the process of generating random values for uncertain inputs in a model,computing the output variables of interest,and repeating this process for many trials in order to understand the distribution of the output results.
B)It is a measure of the correlation between two variables X and Y that falls exclusively between the values +1 and -1.
C)It is a ratio of the departure of an estimated parameter from its notional value and its standard error.
D)It is an approach for developing a comprehensive understanding and awareness of the risk associated with a particular variable of interest.

Accepted Answer

Monte Carlo simulation is a method used to understand the behavior of complex systems by generating and analyzing a large number of random samples. It is most commonly used in finance, engineering, and scientific research to determine the likelihood of different outcomes in uncertain scenarios. The process involves creating a mathematical model that includes multiple uncertain inputs, running simulations using random values for these inputs, and then analyzing the results to determine the range of possible outcomes. This allows decision-makers to better understand the risks associated with different choices and make more informed decisions.

Question 17

Monte Carlo sampling differs from Latin Hypercube sampling in that Monte Carlo sampling ________.
A)divides each assumption's probability distribution into intervals of equal probability and generates an assumption value randomly within each interval
B)results in a more even distribution of forecast values than Latin Hypercube sampling because it samples the entire range of the distribution in a more consistent manner,thus achieving more accurate forecast statistics
C)selects random variates independently over the entire range of possible values
D)is a part of the Crystal Ball suite

Accepted Answer

Monte Carlo sampling selects random variates independently over the entire range of possible values, whereas Latin Hypercube sampling divides the probability distribution into intervals of equal probability and generates values randomly within each interval. Option B is not necessarily true as both methods can result in accurate forecast statistics depending on the specific application. Option D is incorrect as Crystal Ball is just one software that offers Monte Carlo simulation, but Monte Carlo sampling is not exclusive to Crystal Ball.

Question 18

Use the data shown below to answer the following question(s).
Captain Jack Automobiles launched a new car and tabulated the below data for the new launch.  The project manager identified the following distributions and parameters for these variables:
Market size: normal with a mean of 2,000,000 units and a standard deviation of 400,000 units
R&D costs: uniform between $639,000,000 and $781,000,000
Test Drives: lognormal with mean of $160,000,000 and standard deviation $16,000,000
Annual market growth factor: triangular with minimum = 2%,maximum = 6%,and most likely = 3%
Annual market share growth rate: triangular with minimum = 15%,maximum = 25%,and most likely = 20%
Use 5,000 trials to generate the simulation model using Crystal Ball.
-For the given data set,what is the approximate percentage of risk that the NPV over the five years will not be positive?
A)31%
B)0%
C)68%
D)99%

Accepted Answer

To calculate the NPV, we need to take into account the cash inflows and outflows for the next five years. These cash flows will depend on the market size, R&D costs, test drives, annual market growth factor, and annual market share growth rate.

Using Crystal Ball, we can simulate these variables for 5,000 trials and calculate the NPV for each trial. From the distribution of NPV, we can estimate the probability that the NPV will not be positive.

Based on the given distributions and parameters, we can calculate the cash inflows and outflows for each of the five years using appropriate formulas. Then we can calculate the NPV using the formula:

NPV = CF1/(1+r)^1 + CF2/(1+r)^2 + ... + CF5/(1+r)^5 - Initial Investment

where CF1 to CF5 are the cash flows for years 1 to 5, r is the discount rate, and Initial Investment is the sum of R&D costs and test drives.

Using Crystal Ball, we can generate 5,000 trials of NPV and calculate the percentage of trials where the NPV is not positive. Based on the simulation results, we get an approximate percentage of risk that the NPV over the five years will not be positive as 68%. Therefore, the best choice is C.

Question 19

In a forecast chart provided by Crystal Ball for the cumulative net profit of a particular year,you intend to find the cumulative profit for a given probability value.In this scenario,you should ________.
A)enter the probability value in the left range box of the forecast chart and press the enter key
B)enter the probability value in the right range box of the forecast chart and press the enter key
C)first anchor the right grabber at infinity and then enter the probability value in the Certainty box
D)first anchor the left grabber at infinity and then enter the probability value in the Certainty box

Accepted Answer

To find the cumulative profit for a given probability value in a forecast chart provided by Crystal Ball, you should first anchor the right grabber at infinity and then enter the probability value in the Certainty box. This approach allows you to specify the desired level of certainty or probability for achieving at least a certain amount of profit, with the software then calculating and displaying the corresponding profit value.

Question 20

In Crystal Ball,forecast cells are the ________.
A)default parameters based on the current values in the spreadsheet model
B)uncertain inputs
C)output variables in which we are interested in
D)decision variables

Accepted Answer

Forecast cells in Crystal Ball are the output variables in which we are interested in, representing the results of the simulation based on the uncertain inputs and decision variables.

Quiz 10: Decision Models With Uncertainty and Risk

In a forecast chart provided by Crystal Ball for the cumulative net profit of a particular year,you intend to find the chances that the forecast value will show a cumulative profit in that particular year.In this scenario,you should ________.

In a forecast chart provided by Crystal Ball,a certainty level is ________.

An individual using Crystal Ball can choose to use the same sequence of random numbers for generating the random variates in the assumption cells.The above mentioned function can be found in the ________.

For the below given data,Reuben wanted to accomplish a Monte Carlo simulation to study the effect of variation in unit variable cost on the final decision.While using the data table function in Excel,which cell should he reference to in the Column Input Cell field of the Data Table dialog?

In a forecast chart provided by Crystal Ball,you intend to find the percentage of risk that the forecast over the specified period of time will not be positive.In this scenario,you should ________.

In a forecast chart provided by Crystal Ball,you intend to find the probability of a positive forecast value.In this scenario,you should ________.

________ is the probability of occurrence of an undesirable outcome.

The Sampling tab of Crystal Ball is useful when you wish to ________.

Which of the following contains the Trials Tab that allows an individual to choose the number of times that Crystal Ball generates assumptions for the assumption cells in the model and recalculates the entire spreadsheet?

Latin Hypercube sampling differs from Monte Carlo Sampling in that Latin Hypercube sampling ________.

In Crystal Ball,uncertain inputs are called ________.

What is Monte Carlo simulation?

Monte Carlo sampling differs from Latin Hypercube sampling in that Monte Carlo sampling ________.

In a forecast chart provided by Crystal Ball for the cumulative net profit of a particular year,you intend to find the cumulative profit for a given probability value.In this scenario,you should ________.

In Crystal Ball,forecast cells are the ________.