A firm prefers to assume a probability distribution concerning each of the major inputs for the net present value of a project and then randomly draw those inputs over and over again until a distribution is generated for the net present value of an entire project.The firm is performing

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The firm is using a Monte Carlo analysis to generate a probability distribution for the net present value of a project. This involves randomly drawing inputs to generate multiple scenarios and calculating the net present value for each scenario, leading to a distribution of net present values. Sensitivity analysis involves changing one input at a time to see how it affects the net present value, while scenario analysis involves analyzing specific scenarios or outcomes.

A Firm Prefers to Assume a Probability Distribution Concerning Each