Which of the Following Simulation Outputs Is Likely to Be

question 45

Multiple Choice

Which of the following simulation outputs is likely to be most useful and easy to interpret? The output shows the distribution(s) of the project:

• A) Earnings
• B) Internal rate of return
• C) Cash flows
• D) Profits

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Definitions:

Effective Annual Rate

The real return on an investment, taking into account the effect of compounding interest as opposed to just the nominal rate.

Annuity Due

An annuity in which the payments are made at the beginning of each period; contrast with ordinary annuity, where payments are made at the end of the period.

Ordinary Annuity

Uniform payments issued at sequential period endings, over a pre-defined timespan.

Savings Account

A deposit account held at a bank or financial institution that offers interest earnings and the safety of the deposited funds.