Use the Information Below to Answer the Following Question(s) Suppose That the Project Manager of Trance Electronics Has Identified
Use the information below to answer the following question(s) . Below is a spreadsheet for Trance Electronics. Suppose that the project manager of Trance Electronics has identified the following uncertain variables in the model and the distributions and parameters that describe them, as follows: Market size: normal with mean of 20,000,000 units and standard deviation of 4,000,000 units. R&D costs: uniform between $600,000,000 and $800,000,000.
Clinical trial costs: lognormal with mean of $150,000,000 and standard deviation $30,000,000. 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%.
The number of trials per simulation is equal to 10,000 at a Sim. Random Seed of 2. Run the simulation and answer the following questions using the Risk Solver Platform.
-What is the risk that the net present value over the 5 years will not be positive?
A) approximately 40%
B) approximately 57%
C) approximately 24%
D) approximately 77%
Correct Answer:
Verified
Q6: Why is the ROUND function used in
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Q8: How does the Risk Solver Platform define
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Q13: Which of the following best defines Monte
Q14: Monte Carlo sampling differs from Latin Hypercube
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