Examlex

Solved

A Company Has Improved Its Anti-Virus Program and Has Released

question 27

Essay

A company has improved its anti-virus program and has released a new version. Assume there is a 0.6 probability that the users of this anti-virus will upgrade the version in any particular year. That is, the upgrade year of the user is a geometric random variable. The revenue generated from the upgrade (when it occurs) follows a normal distribution with a mean of $80,000 and a standard deviation of $22,000.
a. Complete a simulation model that analyzes the net present value of the revenue from the user upgrade. Use an annual discount rate of 8 percent.
b. What is the average net present value earned by the company?
c. What is the standard deviation of net present value?


Definitions:

Branches

In computer science, it refers to instructions in a program that can cause the execution to jump to a different part of the program based on a condition.

Input

Data or signals received by a system, device, or program for processing.

Output

An output refers to the data or signals that are produced by a system or process, transferring information from the inside to the outside.

PLC Scans

The cyclic process by which a Programmable Logic Controller (PLC) reads input, executes logic, and updates output, forming the basis of its operating cycle.

Related Questions