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 trails to generate the simulation model for NPV using Crystal Ball.
-Using the Tornado Chart tool,determine the assumption that has the least impact on the NPV.
A)Market size
B)R&D
C)Test Drives
D)Time of cash flow

Question

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 trails to generate the simulation model for NPV using Crystal Ball.
-Using the Tornado Chart tool,determine the assumption that has the least impact on the NPV.
A)Market size 
B)R&D 
C)Test Drives 
D)Time of cash flow

Quizplus · Accepted Answer

The Tornado Chart tool is used in sensitivity analysis to determine how changes in input variables affect outputs. The assumption that has the least impact on the Net Present Value (NPV) would be positioned at the bottom of the Tornado Chart, indicating its minimal influence. "Test Drives" likely has the least direct financial impact compared to market size, R&D, and timing of cash flows, which are directly tied to revenue, costs, and the discounting of cash flows, respectively.

Use the Data Shown Below to Answer the Following Question(s)