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

question 86

Multiple Choice

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%

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Definitions:

Simple Random Sample

A sampling method where each member of the population has an equal chance of being selected, minimizing bias and ensuring representativeness.

Histogram

A graphical representation of the distribution of numerical data, often used to visualize the shape, spread, and central tendency of data.

Distribution

In statistics, the arrangement of values of a variable showing their observed or theoretical frequency of occurrence.

Normal Distribution

A bell-shaped distribution characterized by its mean and standard deviation, where the majority of data points are concentrated around the mean.